9.22.16 - Fed Inaction Revives Gold Bulls
Gold last traded at $1,344 an ounce. Silver at $20.09 an ounce.
NEWS SUMMARY: Precious metal prices extended gains Thursday following a weaker dollar and inaction by the Fed. U.S. stocks staged a small relief rally on the Fed's postponed rate hike, despite downbeat housing data.
Fed’s Inaction Revives Gold Bulls, Propels Metals and Miners -Bloomberg
"The Federal Reserve’s inaction has again revived gold bulls, and industrial metals and miners are getting a ride as well. Gold rose to the highest in two weeks after policy makers kept U.S. interest rates unchanged for a sixth straight meeting and cut their outlook for rate increases next year. The dollar slipped for a third time this week, making metals cheaper for holders of other currencies. Low rates and efforts by central banks to bolster economic stimulus are driving demand for gold as a store of value. Bullion is headed for a third quarterly gain, the longest rally since 2011, when prices surged to a record."
By kicking the 'interest rate hike' can down the road, Yellen's Fed hopes to give the economy and markets a "little more room to run." Short-term market speculators cheered the decision, but with inflation pressures building, time will tell if this was a wise decision. The fact that investors are so worried over a measly .25% rate hike illustrates how fragile the economy and markets are presently. Now is the time to reinforce your portfolio with real money; gold. Our 2016 Gold Report - World Edition explains why gold's trajectory is upward, regardless of what the Fed does.
Stocks are stuck in a holding pattern despite the Fed, Fidelity analyst says -CNBC
"Stocks may have rebounded after the Federal Reserve left interest rates unchanged, but investors shouldn't expect a significant rally until earnings growth returns, Fidelity Investment's director of global macro said Thursday....'If there's no earnings growth,' he told CNBC's 'Squawk Box'. 'There's only so much you can do in terms of a market rally no matter what the Fed does, and that's why we're kind of stuck in this holding pattern here.'....Whether the stock market can weather a rate hike comes down to earnings growth, Timmer said. Despite four straight quarters of earnings declines, equities have risen as investors pile into the market for equities and other risk assets to find returns that government debt is no longer producing."
UN fears third leg of the global financial crisis - with prospect of epic debt defaults - Telegraph
"The third leg of the world's intractable depression is yet to come. If trade economists at the United Nations are right, the next traumatic episode may entail the greatest debt jubilee in history. It may also prove to be the definitive crisis of globalized capitalism, the demise of the liberal free-market orthodoxies promoted for almost forty years by the Bretton Woods institutions, the OECD, and the Davos fraternity. 'Alarm bells have been ringing over the explosion of corporate debt levels in emerging economies, which now exceed $25 trillion. Damaging deflationary spirals cannot be ruled out,' said the annual report of the UN Conference on Trade and Development (UNCTAD)....The UN's advice to the emerging nations is to retake control of their destiny and turn the tables on the financial elites. They should impose capital controls, preferential tax treatment for retained earnings, and force fund managers to hold assets for longer. They should allocate credit without apology, and learn a trick or two from the Korea's methods of 'financial repression'."
Dennis Gartman: "We Are Entering The “Zimbabwe-isation” Of The Global Capital Markets" -Zero Hedge
"Share prices are sharply higher once again, as all ten of the markets comprising our International Index have risen over the course of the past twenty four hours with the markets in 'The Americas' leading the way higher with the S&P rising a bit more than 1%; with stocks in Canada rising 1.3% and with the market in Brazil willingly overcoming the political confusion there to rise 1.1%. That strength, rather obviously, follows the non-decision by the Federal Reserve Bank to avoid any thoughts of tighter monetary policies until December… if even then. That non-decision decision gives 'aid and comfort' to other central banks around the world to be as aggressive as they wish to be in order to sponsor economic growth, employment growth and inflation when and where they are able. We are, it seems to us, entering the period we shall call the 'Zimbabwe-isation' of the global capital markets and we say that with all sincerity… and requisite trepidation... recalling that the Zimbabwe stock market led the world to the upside several years ago as the central bank there lost all control of its money supply and created a massive, rampant inflation that sent the Zimbabwe dollar into oblivion but sent the Zimbabwe stock market soaring at the same time."
Mr. Gartman is not alone in his fear of rampant inflation causing paper currencies to evaporate virtually overnight; as has happened in Weimar, Germany, Argentina and Zimbabwe. It is better to be a year early than one day late to own gold as wealth insurance. Act now to discover The Timeless Truth About Gold & Silver.
9.21.16 - The Fed's Unsolvable Credibility Problem
Gold last traded at $1,331 an ounce. Silver at $19.76 an ounce.
NEWS SUMMARY: Precious metal prices rose over 1% Wednesday after both the Fed and BOJ decided to stand pat on their near-zero interest rate policies. U.S. stocks cheered the Fed's do-nothing policy decision to remain "accommodative".
Gold Seen Entering a Long-Term Bull Cycle -Bloomberg
"Gold will likely soar to a record within five years as asset bubbles burst in everything from bonds to credit and equities, forcing investors to find a haven, according to Old Mutual Global Investors’ Diego Parrilla. The metal is at the start of a multi-year bull run with a 'few thousand dollars of upside' in a world of 'monetary policy without limits' where central banks print lots of money and low or negative interest rates prevail, said Parrilla....'If we’re able to normalize global monetary policy, and we can do that in a way that doesn’t result in the implosion of some of the bubbles we’ve been building, the appeal of gold as a safe haven might diminish,' Parrilla said. 'But I think it’s highly unlikely we will have a very smooth unwind of all these years of monetary excess.'"
Fed faces a credibility problem -CNNMoney
"Federal Reserve leaders are facing renewed criticism about their credibility. Often, a few top officials speak publicly in favor of increasing interest rates. Then days later, another one of them talks down a rate hike. These conflicting messages from the Fed's top leadership continue to hurt public confidence in the Fed, experts say. 'This is a disaster in terms of credibility,' says Dan North, chief U.S. economist at Euler Hermes....Stock markets can get rattled when leaders of the decision-making Federal Open Market Committee hint at raising rates, says Ed Yardeni, chief investment strategist at Yardeni Research. He called it the 'Federal Open Mouth Committee.'....The Fed 'needs to save face by hiking at least once this year,' says Christopher Veccio, a currency analyst at DailyFX, a research firm."
Putting faith in the Fed is like putting faith in bad money; both are destined for failure over time. The upcoming book, Money, Morality & The Machine, explores this nexus between bad money and bad values. According to the book preview, "The Federal Reserve, created in 1913, was supposed to protect the value of the U.S. Dollar, but this new central bank’s charter said the Fed was to 'furnish an elastic currency' that gave politicians vastly more money to spend. Thanks to the Federal Reserve and runaway government spending, the U.S. Dollar now has only about two pennies of the gold-backed 1913 dollar’s purchasing power. Authors Smith and Ponte calculate that more than a century of political manipulation of our money has cost Americans at least $220 Trillion, much of it expropriated through the invisible tax of inflation that debased our money, debased our social morals, and gave America the best government money can buy." (Request a Free Book Preview here)
Bank of Japan announces major policy overhaul in latest bid to goose economy -CNBC
"Japan's central bank kept rates steady at its meeting Wednesday, but issued a plethora of fresh changes to its policy approach, marking its latest attempt to boost prices and goose economic growth....It said it would buy 10-year Japan government bonds (JGBs) so that the yield would hover around zero percent while keeping a lid on short-term rates....Markets may read the statement as a 'whatever it takes' moment for expanding the monetary base until Japan begins to see some of the inflation it has long sought.... 'The conclusion to the comprehensive review is underwhelming,' Patrick Bennett, a foreign-exchange strategist at CIBC, said in a note on Wednesday. 'Today's actions can't manufacture inflation, and never could.'"
Central Banking's 5 Stages of Death -Market Slant
"Denial: Kuroda: BOJ isn’t reaching its limits for bond buys at all - did he really say 'at all'?....Bargaining: Kuroda announces CPI-ex food target of 2% within 2 yrs. Currently <2%. Replaced today target of >2% in the undefined future....Anger: Abe says he will keep on fighting to boost Japan's economy....Sadness: Probably on full display in the Abe and Kuroda households tonight....Acceptance?: Central Bank’s Policy Cupboard is Bare. BOJ announcement today was a tacit admission of their inability to do what they claim they can....Inflation is coming. The unsterilized, in your face kind. Because CBers cannot afford to have stagflation. If they are going to get the global economy moving and inflation is a consequence, then so be it. They have too much vested from their ivory towers to admit they are wrong."
9.20.16 - Will the Fed Risk Shocking the Markets?
Gold last traded at $1,318 an ounce. Silver at $19.27 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday despite a firmer dollar ahead of Wednesday's Fedspeak. U.S. stocks inched higher following disappointing housing data; while investors awaited monetary policy decisions from the Fed and the Bank of Japan.
Fed again poised to cut longer-run interest rate forecast -Reuters
"U.S. Federal Reserve policymakers are set this week to again cut their forecasts for how high interest rates will need to go in an economy where output, productivity and inflation are growing at a slower pace than in past decades. It would be the fourth time in 15 months that the U.S. central bank has been forced to admit its estimate of this so-called neutral rate was too optimistic, raising questions about the health of the economy in the coming years....The Fed is expected to leave its benchmark overnight interest rate unchanged following its two-day meeting on Wednesday, according to a Reuters poll of economists....The Fed has not raised rates this year despite signaling in December that four rate hikes were coming in 2016."
To better understand how and why the Federal Reserve has consistently made bad policy decisions about interest rates and quantitative easing, we suggest reading Money, Morality & The Machine, which is due for release in early October. (Get a Free Book Preview here)
What a Fed surprise would mean to markets -CNBC
"With the Federal Reserve meeting getting underway on Tuesday, one strategist warns that a surprise rate hike will cause a huge amount of turmoil, both in the U.S. and around the world. While Larry McDonald of ACG Analytics believes that it is unlikely that a September rate hike will occur, he predicts that a surprise hike would spur the U.S. dollar, which, in turn, would cause debt troubles worldwide. 'The reason why the Fed has been trapped all year is if they try to hike, you get a surge in the dollar,' he said Monday on CNBC's 'Trading Nation.' 'Because they kept interest rates so low for eight years, there's $8 or $9 trillion of commodity debt, of emerging markets debt and of oil debt that have been issued out that are dollar sensitive.'"
Gold steadies as investors bet against Fed hike -Reuters
Gold steadied on Tuesday ahead of a two-day U.S. Federal Reserve meeting that investors are betting will leave interest rates unchanged....'We are back in this pattern where the expectations about the next rate hike determine the short-term swings - when they are pushed backwards, gold rises and when they are pulled forward gold declines,' Julius Baer analyst Carsten Menke said. Japan's central bank also meets on Tuesday and Wednesday, and could make negative interest rates the primary focus of its monetary policy, moving away from quantitative easing."
Our 2016 Gold Report - World Edition explains the upward trajectory of gold prices in the months and years ahead, regardless of what the Fed does.
7 Reasons Market Risk 'Significantly Exceeds' Reward -HedgeEye
"Hedgeye Financials analyst Josh Steiner listed the many reasons why we think the 'risk-reward' of the U.S. stock market is tilted decidedly to the downside. Here's a brief recap from a recent edition of The Macro Show, 1. You’ve got small business loans and credit quality deteriorating, an enormous part of the economy. 2. You’ve got the rest of the lending complex beginning to tighten. 3. You’ve got the Fed in a position in which it's not able to do much about it. 4. You’ve got a broad swath of economic indicators getting worse. 5. You’ve got market valuation up on a rope. 6. You’ve got the duration of the labor cycle very extended. 7. And then there's this curious case of significant decline in maternity rates taking hold across America. As Steiner summarized: 'To me, it all paints a very fascinating picture of risk versus reward in the marketplace right now, where I think it's pretty plain that risk significantly exceeds what’s being priced into stocks and it's not that uncommon an occurrence.'"
9.19.16 - Central Banks Are Buying Gold. Are You?
Gold last traded at $1,317 an ounce. Silver at $19.29 an ounce.
News Summary: Precious metals prices ended higher Monday on bullish outside markets and a lower U.S. dollar. Stocks wavered between gains and losses as investors brace for this week's central-bank meetings.
Central Banks Have Been Buying Gold With A Vengeance - Market Watch
"Annual net gold purchases of 350 tons a year by world central banks over the past eight years have returned to the 100-year average up to 1970 — reflecting gold’s renewed attractiveness as a safe-haven asset in an environment of uncertainty and low or negative interest rates. An OMFIF research document - the "Seven Ages Of Gold" - contains detailed statistics plotting long-run changes in central banks’ policies on buying and selling gold over seven distinct periods during the past two centuries, each lasting an average of around 30 years.
The latest 'Rebuilding' Period VII has been under way since the financial crisis in 2008. In these eight years, central banks in both developed and developing countries have shown a new fondness for gold, rebuilding its importance as a bedrock of most countries’ foreign reserves. Central banks have been net bullion buyers every year since 2008, adding more than 2,800 tons or 9.4% to reserves."
If The Fed Raises Rates, Gold Will Go Up Says 30 Years Of Data - The Street
"Friday's stronger-than-expected inflation data saw gold drop near three-month lows, and consensus says this week's U.S. Fed decision on interest rates has become D-Day for 2016's previous gains. But history says otherwise. Gold has since 1986 been more likely to rise if rates go up than if they stay the same, and by a greater percentage as well. Longer-term, a rate rise has also been followed by much stronger gold gains than a cut, and more frequently too."
We agree, the bull market in gold will not be deterred by an interest rate increase by the Fed in September or in December. If you need a fresh perspective on the bigger picture please read our 2016 Gold Report - World Edition.
Goldman: One Measure Suggests Stocks Could Crash 25% - Business Insider
"The S&P 500 is looking a little pricey, according to Goldman Sachs' David Kostin. Kostin, Goldman's chief equity strategist, said in a note to clients that even though companies in the S&P 500 are becoming less and less profitable, they are not being penalized by investors.
Based on the current ROE of the aggregate S&P 500, according to Kostin, there is significant reason to believe there is some downside.....Kostin has been warning about a possible pullback in equities for some time, as the market appears to be expensive compared to its historical average based on a number of metrics. This is another metric in that pullback narrative."
Heath Care Costs Rise By Most In 32 Years - CNN Money
"Prices for medicine, doctor appointments and health insurance rose the most last month since 1984. The price increases come amid a broader debate about climbing health care costs and high premiums for Obamacare coverage. A recent report by Kaiser/HRET Employer Health Benefits forecasts that the average family health care plan will cost $18,142, up 3.4% from 2015. That's faster than wage growth in America. Medical care costs altogether rose 1% just in August from July, according to the Consumer Price Index, a report on price inflation from the U.S. Labor Department. Premiums on the Obamacare exchanges are expected to rise by double-digits this year. "
9.16.16 - Is Economic Freedom in Decline?
Gold last traded at $1,310 an ounce. Silver at $18.84 an ounce.
NEWS SUMMARY: Precious metal prices ended the week lower amid a firmer dollar and ongoing Fed rate hike speculation. U.S. stocks traded lower as investors digested key inflation data and looked ahead to next week's Fed meeting.
Gold steadies as U.S. data curbs rate rise speculation -Reuters
"Gold steadied above two-week lows on Friday after downbeat U.S. data curbed already muted expectations for a U.S. rate rise next week, though a firmer dollar and uncertainty over monetary policy kept it on track for its first weekly loss in three. The CME Group's FedWatch tool showed futures traders are now pricing in a 12 percent chance of a rate rise this month, down from 15 percent on Wednesday, after soft U.S. retail sales and manufacturing output data....While expectations for a September rate rise have faded, a new Reuters poll of 100 economists showed a median 70 percent chance of an increase in December."
The Fed Used Jackson Hole to Plan Negative Rates -Mauldin/Tumblr
"Jackson Hole revealed things that did not make it into reports by the mainstream media. Turns out, the academic and philosophical underpinnings were being laid down for a radical expansion of the Federal Reserve’s toolbox. The unthinkable policy that I’ve been warning about since last May - yes, we’re talking negative rates - was not only discussed at Jackson Hole, it was discussed in a positive, even slavishly approving, manner....Yellen went from being unsure that the Fed had legal authority to use negative rates to having no doubt that it could. That’s not a small shift. It tells us that somewhere deep in the bowels of the Fed, someone is cooking up some NIRP contingency plans. Having established that it has legal authority to use NIRP, the Fed can now develop specific plans for doing so."
Back on August 30th, we reported the Jackson Hole meeting of the financial elite included a discussion on The Case for Unencumbering Interest Rate Policy at the Zero Bound- Marvin Goodfriend, as reported by MarketSlant.com, which concluded, "Our takeaway was that this document was not just a discussion on NIRP risk and how to assess if/when to use it. This was also an answer key on how to make it happen. And among those recommendations was to 'Abolish Paper Currency'." Yes, behind the scenes central bankers are planning to steer interest rates downward as well as abolish cash as fast as possible, as we cover in TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
How Love Translates Into Gold -Holmes/Business Insider
“Loyal readers know that the Fear Trade is associated with negative real interest rates and excessive money supply, which triggers an imbalance of monetary and fiscal policies and macroeconomic uncertainty. Historically, investors in the U.S., Japan, Germany and the U.K. have been the main drivers of the global Fear Trade. The Love Trade, on the other hand, is all about gold’s powerful allure and its timeless role as a gift without peer. It has two significant benefits: one, as beautiful gold jewelry to be worn, and two, as financial security. Although gold jewelry is often given as a special gift in Western countries, it pales in comparison to what takes place in China and India, or ‘Chindia’- home to about 40 percent of the world’s population, and the two largest gold importers.....Significant to boosting the metal’s price are important cultural events, from India’s upcoming Diwali festival and fourth-quarter wedding season to the Chinese New Year in January. Going back decades, the yellow metal has tended to perform best in September, when jewelry, coin and bullion dealers restock their inventories in preparation for these celebrations."
Economic Freedom of the World -CATO
"The foundations of economic freedom are personal choice, voluntary exchange, and open markets. As Adam Smith, Milton Friedman, and Friedrich Hayek have stressed, freedom of exchange and market coordination provide the fuel for economic progress. Without exchange and entrepreneurial activity coordinated through markets, modern living standards would be impossible....The United States, once considered a bastion of economic freedom, ranks 16th for a second consecutive year with a score of 7.75. Due to a weakening rule of law, increasing regulation, and the ramifications of wars on terrorism and drugs, the United States has seen its economic freedom score plummet in recent years, compared to 2000 when it ranked second globally."
Fifty years ago Alan Greenspan wrote, "Gold and freedom are inseparable." As freedom in America ebbs it is important to own more gold to offset the consequences. "Bad money drives good morals out of society," writes Swiss America Chairman Craig R. Smith in his upcoming book, Money, Morality & The Machine, due for release in early October. (Get a Free Book Preview here)
9.15.16 - Is The Fed 'Crazy'?
Gold last traded at $1,318 an ounce. Silver at $19.04 an ounce.
NEWS SUMMARY: Precious metal prices traded mixed Thursday on a flat dollar ahead of the next Fed meeting. U.S. stocks traded higher as investors cheered Apple earnings, deciding to ignore a series of downbeat economic reports.
Greenspan Worries That ‘Crazies’ Will Undermine the U.S. System -Bloomberg
"Former Federal Reserve Chairman Alan Greenspan voiced concern that the U.S. economic and political system could be undermined by what he called 'crazies.' 'It is the worst economic and political environment that I’ve ever been remotely related to,' Greenspan, 90, told a conference in Washington Tuesday evening sponsored by Stanford University and the University of Chicago. On the economic front, the U.S. is headed toward stagflation - a combination of weak demand and elevated inflation, according to Greenspan. 'Politically, I haven’t a clue how this comes out.'....Greenspan repeated his concern on Tuesday that increased government spending on social security and healthcare are crowding out private investment and leading to slower economic growth. He bemoaned the fact that neither presidential candidate was talking about reining in those expenditures."
Who’s Greenspan Calling Crazy? -New York Sun
"So who is Alan Greenspan suggesting is crazy?...No doubt the Democratic Party press is going to start suggesting that the crazies to whom Mr. Greenspan was referring are the Republicans led by Donald Trump....Maybe, though, Mr. Greenspan is suggesting that the Democrats, led by Hillary Clinton, are the crazy ones. Hamilton, after all, was America’s first treasury secretary; he wrote the law through which Congress first exercised its power to coin money and regulate the value thereof and of foreign coin. Hamilton’s law, known as the Coinage Act of 1792, defined the dollar as a given weight of silver or gold. The basic concept endured through nearly two centuries. Now, economist Judy Shelton has written, the central bankers insist that those who think of the dollar the way Hamilton did are the ones who are crazy. 'Really?' she asks, 'Crazier than negative interest rates? Crazier than paying banks to keep loanable funds in sterile depository accounts at the Fed? Crazier than having the Fed buy up trillions in government debt, remit the interest payments back to treasury, and then count that as revenue to the federal budget?'"
Alexander Hamilton would roll over in his grave to see how bankers have folded, spindled and mutilated the meaning and value of the U.S. dollar in the last century. We recommend converting paper I.O.U. debt (paper money) into the world's ultimate form of money - gold - now before any more "crazies" take over leadership, from either political party.
U.S. Among Most Depressed Countries in the World -US News
"The U.S. is one of the most depressed countries in the world, according to the World Health Organization. In terms of quality years of life lost due to disability or death – a widely adopted public health metric that measures the overall burden of disease – the U.S. ranked third for unipolar depressive disorders, just after India and China....About one in five adults in the U.S. experiences some form of mental illness each year, according to the National Alliance on Mental Illness, but only 41 percent of those affected received mental health care or services in the past year....Closing the gap between mental health patients and providers is a global issue."
Americans' Trust in Mass Media Sinks to New Low -Gallup
"Americans' trust and confidence in the mass media 'to report the news fully, accurately and fairly' has dropped to its lowest level in Gallup polling history, with 32% saying they have a great deal or fair amount of trust in the media. This is down eight percentage points from last year. Gallup began asking this question in 1972, and on a yearly basis since 1997. Over the history of the entire trend, Americans' trust and confidence hit its highest point in 1976, at 72%...Americans' trust in the media has fallen slowly and steadily. It has consistently been below a majority level since 2007....When opinion-driven writing becomes something like the norm, Americans may be wary of placing trust on the work of media institutions that have less rigorous reporting criteria than in the past."
9.14.16 - Banking’s Culture Crisis
Gold last traded at $1,326 an ounce. Silver at $19.06 an ounce.
NEWS SUMMARY: Precious metal prices rose Wednesday on a weaker dollar amid Fed rate confusion. U.S. stocks struggled following a more than 1 percent sell-off on Tuesday.
Wells Fargo Shows Banking’s Culture Crisis Is Worsening -TIME
“You know there’s something off when a major American bank fires 5,300 employees for illegal tampering with 1.5 million bank accounts and applying for 565,000 credit cards that may not have been authorized by customers, and it’s not top news...Like many financial institutions that have been caught up in scandal before and after the 2008 crisis, Wells likely hopes that by paying a fine but not admitting fault, it can avoid lawsuits from the customers who were bilked, some of whom now have damaged credit thanks to the fraud. That’s just one of the many ‘business as usual’ behaviors in any industry that, eight years on from the biggest financial crisis in 70 years, still has a major culture problem. No wonder a 2014 University of Zurich study found that the banking industry tends to bring out dishonesty in employees; even after years of turmoil, scandal, and fines, the financial sector still struggles with a culture that rewards profit at any cost.”
Good News! We’re Almost as Rich as 15 Years Ago -The Daily Beast
"After more than a decade in the economic doldrums, with too few jobs and stagnant wages afflicting the vast majority of Americans, average incomes rose significantly in 2014, though the average income remains below the level in 2000....The median for 2014 was $38,171, up $733 or 1.9% from $37,438 in 2013, when adjusted for inflation....Despite this rise in average income, it was still, in both 2013 and 2014, well below the year 2000 average, measured in 2014 dollars, of $67,973....Since 2000 average incomes rose above that year only twice, in 2006 and 2007, and then only slightly."
The More Cash People Have, the Happier They Are -Wall Street Journal
"Conventional wisdom says you should be investing as much of your excess money as you possibly can. That may be the best path to greater wealth. But it may not be the best path to happiness. In a previous article we looked at a broad range of research about money and happiness. Some of the main conclusions: Experiences tend to provide more lasting happiness than material goods; giving money away makes people happier than spending it on themselves; and wealthier people do tend to be happier, but only up to a certain point....We find a very interesting effect: that the amount of money you have in your bank account right now is a better predictor of happiness than your aggregate wealth. Having more money in their bank account makes people feel more financially secure, which leads to an increase in happiness."
Think your money is safe in the bank? "DON'T BANK ON IT!" was Craig Smith's response in his widely praised 2014 book. The modern banking system is doomed, warns Smith. Your best option is to find safer havens which offer; liquidity, worldwide acceptance and, most importantly, a time-tested store of value - rather than negative interest rates. Read our free Executive Summary and get prepared - before the next banking domino falls and starts a worldwide cascade of panic.
PAUL SINGER: 'It's a very dangerous time in the global economy' -Business Insider
“A prominent conservative hedge fund billionaire is blaming central bankers for the slow economy. Paul Singer, the founder of the hedge fund Elliott Management, said Tuesday that policymakers needed to consider fiscal policies to spur the economy, arguing that they had created a risky environment for investors. ‘Central bankers say, Growth hasn't really picked up, but in the absence of what we're doing it would have been a lot worse,’ Singer said at the CNBC Institutional Investor Delivering Alpha conference in New York....‘What they have done is created a tremendous increase in hidden risk. Risk that investors don't exactly know or have faced about their holdings.’ ‘I think it's a very dangerous time in the global economy and global financial markets,’ he added....Singer also said Tuesday that the bond markets were facing a bubble situation, and he recommended that investors sell their 10-, 20-, and 30-year bonds. ‘These are not safe havens,’ he said. ‘In fact, there's a tremendous amount of risk.’ He has also recommended holding gold.”
9.13.16 - Wells Fargo: Another Money & Moral Failure
Gold last traded at $1,323 an ounce. Silver at $18.97 an ounce.
NEWS SUMMARY: Precious metal prices traded in a tight range Tueasday on a firmer dollar and Fed uncertainty. U.S. stocks fell sharply as investors looked ahead to next week's Fed meeting while keeping an eye on falling oil prices.
September U.S. Rate Hike Wouldn’t Spoil Appetite for Gold -Bloomberg
"For the manager of SPDR Gold Shares, the largest exchange-traded fund backed by the metal, not even a surprise increase in borrowing costs this month would be enough to damp investors’ appetite for gold. Almost $12 billion has poured into SPDR Gold this year, poised for the biggest annual inflow since its inception in 2004. While a Fed hike this month could trigger a broad-based selloff in markets, it wouldn’t cause gold to slide into a bear market because rates would still be near historic lows, said David Mazza, the head of ETF and mutual-fund research at State Street Global Advisors."
We agree, the bull market in gold will not be deterred by a .25% interest rate increase by the Fed in September or in December. If you need a fresh perspective on the bigger picture please read our 2016 Gold Report - World Edition.
How Regulation Failed with Wells Fargo -The New Yorker
“'Team members,' as Wells Fargo prefers to call its employees, had strict mandates to sign existing customers up for additional products. Someone with a savings account should be convinced to open a checking account, get a credit card, transfer a 401(k), and maybe even take out a mortgage. The sales targets were so high that many employees found them impossible to meet, until someone hit upon an ingenious solution: ignore the customers’ wishes, as well as banking law and basic ethics, and open up new accounts even when the clients had asked them not to. In some cases, customers were charged late fees on accounts they hadn’t requested and that they didn’t know they had....Bad behavior should lead to fines large enough to infuriate shareholders and cost C.E.O.s their jobs. What’s more, these executives need to know that they will face criminal prosecution when they direct or ignore criminal activity."
"Bad money drives good morals out of society," writes Swiss America Chairman Craig R. Smith in his upcoming book, Money, Morality & The Machine, due for release in early October. (Get a Free Book Preview here) This latest episode with Wells Fargo supports Smith's statement. Today banks are so desperate to boost sales in a Fed-created zero-interest environment, that over 5,000 employees decided to compromise their ethics. Very sad. On the upside, Zero Hedge reports, "Wells Fargo said that it would eliminate all product sales goals in retail banking, starting next year."
The Age of Stagfusion -The Economist
"The Federal Reserve looks more likely to increase rates this year while the European Central Bank (ECB) failed to add any stimulus last week. The narrowing presidential polls in America (and the health scare for Hillary Clinton) can be thrown into the mix; there is not the usual investor enthusiasm for the Republicans, given the nature of the nominee. But the underlying problem needs a new word—stagfusion. Investors have become used to low interest rates and bond yields since central banks started to loosen policy in 2008....So investors are confused. They recognize that a world of zero interest rates and negative bond yields is inherently strange and problematic and fear it can’t last forever. But they worry what will happen when they cease to benefit from all that central bank support. Perhaps stagnation is better than the alternative? Hence 'stagfusion'."
Stagflation, stagnation or stagfusion - call it what you like - the U.S. economy and job creation are both stuck. Meanwhile, the real cost of living is rising. In the late 1970s stagflation nearly crushed the middle class over several years. President Reagan and Fed chairman Paul Volker made some tough choices to stabilize the economy which ultimately created a jobs boom in the 1980s. Often the toughest choices are also the wisest choices over the long term.
The largest wealth transfer in history has already begun -Marketwatch
"The rich appear to be leaving the middle class behind. Most U.S. middle-income households (81%) had flat or falling income between 2004 and 2014, according to recent U.S. Congressional Budget Office data analyzed by the McKinsey Global Institute, a global management company. And 61% of middle-income households say their incomes are either not advancing or they’re staying the same as they were last year: 'Most people growing up in advanced economies since World War II have been able to assume they will be better off than their parents. Yet this overwhelmingly positive income trend has ended.'....Last year, ultrahigh-net-worth individuals - defined as those with assets of $30 million or more - aged 80 or over were on average seven times wealthier than those under 30 years old."
9.12.16 - Prepare For Market Volatility
Gold last traded at $1,325 an ounce. Silver at $19.00 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday on speculation the Fed may lift interest rates this month. U.S. stocks rose following a global equities sell-off as investors wondered what the Fed will do.
Selloff gathers pace as stimulus pullback fears deepen -Reuters
"European stocks and bonds fell in a volatile market on Monday, hit by growing concerns that global central banks' commitment to the post-crisis orthodoxy of super-low interest rates and asset purchase programs may be waning....Selling was driven by revived prospects of the U.S. Federal Reserve hiking rates next week, and concerns that the European Central Bank and the Bank of Japan may be slowing their monetary policy easing efforts. 'It's a pretty broad-based sell-off on an increasing view that perhaps central banks are going to draw back from providing ever more easing,' said RBC European economist Cathal Kennedy."
Don't Let Them Crush You Again -Hedge Eye
"Did you see?...what stocks, bonds, and commodities did on one Fed voter (Boston's Eric Rosengren) ramping his rate hike rhetoric on Friday? How about eviscerating all the no-volume 'gains' of the SPY’s summer on a +46.5% volatility (VIX) spike?....As I've said many times before, "risk happens slowly at first, then all at once.'....Remember... Every seven years or so, most investors get royally crushed by these centrally-planned bubbles, by Old Wall Street and its head-in-the-sand research analysts, and by the woefully blind financial media supporting it. Don't let them crush you again. Don't be a sheep."
Time to Consider More Gold and Silver Following the Latest Fiat Crash? -The Daily Bell
"The Federal Reserve’s ongoing policy failures once again wrecked markets on Friday. Just a hint that the Fed might raise at its next formal meeting caused reverberations around the world and dropped averages in numerous markets....In fact, what the Fed intends to do only makes sense if one remembers that central banks are at this point nothing more than a tool of global governance. Elites are determined to consolidate government at a global level and it will likely take various forms of catastrophe – war and economic ruin especially – to generate the necessary impetus to create and impose what’s necessary....Conclusion: The cycle is turning and physical precious metals as well as precious metals miners are likely to generate profits that will outstrip mainstream equity and fixed-income positions."
Post-recession Americans don’t need money to find happiness -New York Post
"The American Dream is being remade in the wake of the Great Recession. Just as necessity is the mother of invention, a recession can be the father of consciousness. More and more of us are becoming conscious of the ways in which money, and all of the stuff it can buy, doesn’t reliably lead to happiness. Many Americans are trading so-called security for flexibility: Home ownership rates are at their lowest since 1995, and it’s estimated that half of the US workforce will be freelance by 2020. There’s a reason people are obsessed with downsizing and sharing, seeking out experiences rather than storage lockers....Happiness, some of us have come to realize, is realistically less likely to be earned by the individual and more likely to stem from community."
9.9.16 - Are Tech Stocks in a Bubble?
Gold last traded at $1,328 an ounce. Silver at $19.06 an ounce.
NEWS SUMMARY:Precious metal prices retreated Friday on a stronger dollar following Fedspeak. US equities closed sharply lower as concerns the Fed might raise interest rates loomed.
Central bank gold buying – what the media reports don’t really
tell you -Sharps Pixley
"There’s been a fair amount of media coverage of the reduction in net central bank gold purchases seen so far this year, but the writers of these seem to treat all central banks as one....There have only been three central banks which have consistently added to their gold reserves on a regular basis over the past year – Russia, China and, to a smaller but significant in total effect, extent Kazakhstan. Since China began publishing its monthly gold purchase data in July last year it has, according to IMF data, added 174 tonnes of gold, while Russia has added even more at 230 tonnes....China is set on full internationalisation of the yuan (renminbi) and feels that its gold holdings could help it achieve this. It is already well on its way with the yuan becoming an integral part of the IMF’s Special Drawing Right (SDR) on October 1st. This will give it effective status as A global reserve currency, although not THE global reserve currency."
Stocks sell off, all 3 major indexes post worst day since June 24; Fed fears loom
"U.S. equities traded lower on Friday as concerns the Federal Reserve might raise interest rates this month loomed following a speech made by a Fed official, while eyeing falling oil prices. 'The commentary from a voting member that the Fed may be forced to raise rates is important,' said Kim Forrest, senior equity analyst at Fort Pitt Capital. 'I think the market needs to understand that there may be a rate hike coming. Whether it's September or December, it doesn't matter big picture.'"
Are tech stocks in a bubble? -Craig R. Smith/Fox
Neil Cavuto of Fox Business interviews Craig R. Smith, Chairman of Swiss America on Thursday, September 8. Watch now to hear Smith's predictions on where this over-valued market is headed. WATCH HERE
Wells Fargo Fires 5,300 For Engaging In Massive Fraud, Creating
Over 2 Million Fake Accounts -Zero Hedge
"For years we have wondered why Wells Fargo, America's largest mortgage lender, is also Warren Buffett's favorite bank. Now we know why. On Thursday, Wells Fargo was fined $185 million, (including a $100 million penalty from the Consumer Financial Protection Bureau, the largest penalty the agency has ever issued) for engaging in pervasive fraud over the years which included opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. Regulators said such illegal sales practices had been going on since at least 2011. In all, Wells opened 1.5 million bank accounts and 'applied' 560,000 credit cards that were not authorized by their customers."
What Would It Take to Save the Middle Class? Drastic
change -The Atlantic
"If the well-being of the middle-class is the yardstick by which America’s success is measured, then the country is in trouble....In a report released by the left-leaning Center for American Progress on Thursday, the researchers Carmel Martin, Andy Green, and Brendan Duke offer suggestions for what the next administration can do to to reestablish the middle class....They advocate for increasing the minimum wage and overtime threshold, strengthening unemployment insurance, and establishing a subsidized job program to help those struggling to find work....As the left rallies around these worker-first strategies, conservative groups have their own ideas for how to rebuild the middle class, many of which embody a top-down logic. The Trump campaign, for instance, has advocated lowering both personal and corporate taxes, which it says will spur business growth and bring more economic activity to American shores. Meanwhile, the right-leaning Heritage Foundation has criticized efforts to raise the minimum wage, saying that hikes would burden business owners and result in job loss."
9.8.16 - Recession Jitters Abound
Gold last traded at $1,341 an ounce. Silver at $19.67 an ounce.
NEWS SUMMARY: Precious metal prices eased back Thursday on mild profit-taking after the EU central bank decided to stand pat on current stimulus plans. U.S. stocks traded lower despite a surge in oil prices.
US recession jitters stoke fears of impotent Fed and fiscal paralysis -Evans-Pritchard/Telegraph
"An ominous paper by the US Federal Reserve has become the hottest document in high finance....David Reifschneider's analysis - 'Gauging the Ability of the FOMC to Respond to Future Recessions' - more or less concedes that the Fed has run out of heavy ammunition....This admission is painfully topical as a plethora of data suggest that the US economy may have hit a brick wall in August....Warning signs certainly abound. Corporate profits have been slipping for six quarters, the typical precursor to an abrupt slump in business spending. 'The only thing keeping the US out of recession is the US consumer. If consumption stalls then we really are in trouble,' says Albert Edwards from Societe Generale."
Warnings that the next U.S. recession is already knocking on our door this Fall are growing daily. When consumer spending starts to sputter, watch out! Don't be caught without a golden parachute when stocks, bonds and currencies go into a free-fall. Be prepared! Read our 2016 Gold Report - World Edition.
Stock Market Bubble Will Pop, Social Mood Will Get Extremely Ugly -Zero Hedge
"In efforts to spur lending and increase the rate of inflation, central banks in the US, EU, and Japan have engaged in dubious tactics. Every time their actions fail, they double down in failed strategies....While there are many reasons for the disparity in moods today, I am afraid, the decoupling of Main Street mood from Wall Street mood will represent a clear headwind to the economic thinking behind today’s proposed central bank actions....As a socionomist, I believe that increases in confidence boost both financial asset prices and consumption simultaneously. Mood precedes action, rather than lags it. We act as we feel, driven by our level of confidence. With high confidence we see permanence to our financial condition expecting it to continue long into the future. Sadly, today’s central bankers don’t see confidence/action causality operating this way."
Cash Means Freedom, Which Is Why So Many Officials Hate It -Reason
"Cash - the familiar, anonymous paper money and metallic coins that most of us grew up using - isn't just convenient, it's also a powerful shield for our autonomy and our privacy. That's the argument of cash advocates of course - but also of those economists and government officials who want to abolish the stuff. Cash's power to protect people from meddling and tracking motivates both parties, either to shore up our defenses against the state, or to squish them under their thumbs....Cash is 'printed freedom,' German economist Lars Feld pithily offered as a direct rebuttal to his Council of Economic Experts colleague. People 'should be entitled to an escape from all-out state control,' Deutsche Welle clarified with regard to Feld's views. There's really no argument here. Cash abolitionists fully understand that cash shields individuals from the state - and they hate that protection."
Are financial freedom and privacy important to you? Does it bother you that a new cashless world is being forced on U.S. citizens by economists and government officials? If so, we suggest reading TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
Gold Gains Strength From Weaker U.S. Dollar -Wall Street Journal
"Gold prices gained ground early Thursday, supported by a weaker U.S. dollar and lowered expectations the Federal Reserve could raise interest rates this month....The strength of the dollar has been the driving factor for the gold price for the last few weeks, acting as a signal for expectations of the timing of a future U.S. rate rise, said Carsten Menke, a commodities research analyst at Julius Baer....Low interest rates are typically bullish for gold, which doesn’t bear interest and becomes more competitive against yield-bearing investments when rates stay low."
9.7.16 - Silver & Gold Primed For Price Spike
Gold last traded at $1,349 an ounce. Silver at $19.84 an ounce.
NEWS SUMMARY: Precious metal prices consolidated recent gains Wednesday amid a flat dollar and lackluster Fed statements. U.S. stocks traded mixed with consumer staples lagging.
Gold is getting ready for a super-spike -Rickards/Daily Reckoning
"Right now, if you understand physical gold flows, you could stand to make a fortune in the months and years ahead....The reason is that the price of gold is largely determined in 'paper gold' markets, such as Comex gold futures and gold ETFs. These paper gold contracts represent 100 times (or more) the amount of physical gold available to settle those contracts....But, as soon as paper gold contract holders demand physical gold in settlement, they will be shocked to discover there’s not nearly enough physical gold to go around. At that point, there will be panicked buying of gold....Gold prices are set to skyrocket based on a combination of supply and demand fundamentals and the ETF pro-cyclical feedback loop."
Silver's Volatility Makes It the Precious Metal of Choice -Seeking Alpha
"Silver has been gold's little brother for thousands of years. When you think of money, if precious metals were currency, then silver is the coin and gold the note....The most important thing to remember about silver is that it is more volatile than its precious cousin gold....However, when silver decides to make a move watch out, it has a penchant to shock and move higher or lower than any analyst, trader or investor thinks possible. In October 2008, silver fell to lows of $8.40 per ounce. By April 2011, the price rose to $49.82, an increase of almost 500% in two and a half years. In hindsight the move was one-way, but there were many speed bumps on the way to a five-fold increase in price."
The Swiss America research department has developed three reports which will help our readers and clients stay ahead of the financial curve in 2016 and prepare for dramatic changes wisely; The 2016 Gold Report: Global Edition, The 2016 Silver Report: The Global Metaland The 2016 World Money Report. Request a FREE copy of all three reports today - before the next big price move.
Cash in a Box Catches On as Swiss Negative Rates Bite -Bloomberg
“It’s a sign the world is getting used to negative interest rates when what once seemed bizarre starts looking like the norm. Consider Switzerland, where more and more companies are taking out insurance policies to protect their cash hoards from theft or damage. 'Because of the low interest rate level, we note increasing demand for insurance solutions for the storage of cash,’ said Philipp Surholt at Zurich Insurance Group AG, among underwriters reporting a surge in such requests. ‘We’re seeing demand for coverage for sums ranging from 100 million to 500 million francs.’ The Swiss National Bank imposed sub-zero rates in early 2015, effectively charging banks for excess deposits."
Governments and bankers worldwide have declared a 'war on cash' which is being waged via financial repression and negative interest rates. To better understand exactly how this new cashless world is being forced on U.S. citizens, we suggest reading TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
Europe forges ahead with plans for 'EU army' -Telegraph
“Europe is planning to forge ahead with plans for an EU Army that some fear could eventually displace NATO, with senior officials in Brussels urging EU member states to capitalize on the ‘political space’ left by Britain’s decision to vote to leave. Federica Mogherini, the EU's foreign policy chief, is preparing to forward a timetable setting out steps to create EU military structures ‘to act autonomously’ from NATO. Europe’s top diplomat reportedly told colleagues that the military plan - billed by some countries as the foundation of a ‘European army’ - represented a chance for the EU to relaunch itself after the ‘shocking’ Brexit vote. ‘We have the political space today to do things that were not really doable in previous years,’ Ms. Mogherini told EU ambassadors, according to a report in The Times.”
9.6.16 - Are At-Home Gold IRAs Legal?
Gold last traded at $1,354 an ounce. Silver at $20.13 an ounce.
NEWS SUMMARY: Precious metal prices shot up Monday as shockingly weak U.S. ISM non-manufacturing data dragged the dollar sharply lower. U.S. stocks recovered modestly as downbeat economic news tilted the odds against a Fed rate hike this month.
This Labor Day, let’s acknowledge why our job-creation machine is broken -Marketwatch
"Both presidential candidates have talked a good game about jobs and the economy, but neither addresses the real problem. The U.S. job-creation machine - once the envy of the world - is broken, because American corporations cannot create steady, well-paying jobs here in the USA while also providing maximal returns to their investors, who are really in charge....I won’t shed tears for people who make $19 million a year on average, but the total victory of shareholder capitalism has left top executives dancing to investors’ tunes. For the rest of us, the music is off-key - and nothing being proposed by either presidential candidate or political party will change the corporate mindset in which job creation is a low priority at best and may even be antithetical to investors, who now completely run the show."
Want to Keep Gold in Your IRA at Home? It’s Not Exactly Legal -Wall Street Journal
"Advertisements this summer have claimed that people can invest their tax-free retirement accounts in gold and store it at home. But the IRS has issued a stern warning against the move....One ad, for Hartford Gold Group, shows a smiling couple near an open safe containing gold bars and the text, 'Your Gold, Your Hands, Your Control.' Others urge consumers to 'Start Your Home-Storage Gold IRA' and 'Store IRA metals wherever you choose, even in your own home.' Experts on 'alternative-asset' IRAs, which hold investments other than traded securities, are highly skeptical of this strategy....The Internal Revenue Service says it 'warns taxpayers to be wary of anyone claiming that precious metals held in your IRA can be stored at home or in a safe-deposit box.'....While the courts have allowed IRAs to own LLCs, this strategy as regards precious-metals storage hasn’t been addressed in court."
While it's a very good idea to protect your retirement with a precious metals IRA, the Wall Street Journal confirms why Swiss America has never recommended IRA home storage. Swiss America has always felt strongly that the safest way to maintain peace of mind about your retirement holdings is to open an IRS-approved precious metals IRA, covered in our Precious Metals IRA kit.
James Turk Issues Dire Warning As Fed To Monetize ‘Everything In Sight’ -King World News
"Although the Dow Jones Industrials and other major indices are making new highs, the banking sector is glaringly underperforming....Shares of companies owning real assets – like commodity producers – are glaringly diverging from shares of companies owning financial assets – like banks....The reason this is important Eric, is that this divergence is an early warning sign that the dollar is headed toward hyperinflation. When you look at countries where the currency has hyperinflated - like Zimbabwe or more recently, Venezuela - their stock markets showed this same divergence we are now seeing on the NYSE....Finally, another piece of evidence that the Federal Reserve is heading for a train wreck is this statement from Fed Chair Yellen on Friday: 'Policymakers may wish to explore the possibility of purchasing a broader range of assets.' They are planning to monetize everything in sight, rather than admit that their policies have failed and they are destroying the dollar.”
Gold Withdrawals From The NY Fed Accelerate, Hit 388 Tons Since 2014 -Zero Hedge
"First it was Germany who redeemed 120 tons of physical gold from the NY Fed in 2014; then it was the Netherlands who 'secretly' redomiciled 122 tons of gold; then last May, we learned that Austria would be the third 'core' European nation to repatriate most of its offshore gold, held primarily in the Bank of England, redepositing it in Vienna and Switzerland. That was just the beginning. Thanks to the latest NY Fed data, we now know that beginning in 2014 and continuing through yesterday, the gold 'bleeding' from the vault located 90 feet below street level at 33 Liberty Street is not only continuing but accelerating....According to the Ny Fed, in the seven months ended July 2016, there were a total of 87 tons of gold withdrawals, 25% more than the 69 tons withdrawn in the same period in 2015, and 60% more than the 55 tons withdrawn in 2014."
9.2.16 - Gold's Best Month of the Year Begins
Gold last traded at $1,326 an ounce. Silver at $19.36 an ounce.
NEWS SUMMARY: Precious metal prices rose sharply Friday following downbeat August jobs data despite a firmer dollar. U.S. stocks rose on hopes that slow job growth would prompt the Fed to postpone an interest rate hike until December.
"August Curse" Continues As Payrolls Miss, Rise By Only 151,000; Hourly Earnings Disappoint -Zero Hedge
"With Wall Street expecting another solid month of payroll growth, following multiple-sigma outlier prints in June and July, the whisper expectations was for a miss on the back of the previously discussed 'August Curse' which has seen a consistent miss in the month of August for the past decade, and that is precisely what happened when moments ago the BLS reported that in the month of August only 151K jobs were added, missing the consensus of 180K job growth by nearly 30,000 jobs....The unemployment rate remained flat at 4.9%, despite expectations of a decline to 4.8%, while hourly earnings rose just 0.1%, also missing expectations of 0.2% increase, and down sharply from last month's 0.3% rebound....Most troubling is that the 'any minute now' jump in wages refuses to arrive..."
Gold investors, prepare for the best month of the year -Marketwatch
"September is the best month of the calendar for gold....Since the early 1970s, when it first became legal for U.S. citizens to own bullion, gold has produced an average return of 2.2% in September. The average return for the 11 other months combined is 0.6%, or barely more than a quarter of September’s average gain....Gold’s seasonal tendencies, therefore, stand in stark contrast to the stock market’s, where September is by far the worst month of the calendar....The bottom line: Gold sentiment is improving, even if it is not yet at low enough levels to trigger an outright contrarian “buy” signal. Coupled with positive seasonal tendencies, however, it may be time to give gold the benefit of the doubt."
September is a great time to buy more gold - before its best month of the year becomes history. If you don't yet own gold, we suggest taking advantage of bargain summer prices before the next big move. If you still have questions, please review our 2016 Gold Report - World Edition.
The Idle Army: America’s Unworking Men -Wall Street Journal
"Labor Day is an appropriate moment to reflect on a quiet catastrophe: the collapse, over two generations, of work for American men. During the past half-century, work rates for U.S. males spiraled relentlessly downward. America is now home to a vast army of jobless men who are no longer even looking for work - roughly seven million of them age 25 to 54, the traditional prime of working life. This is arguably a crisis, but it is hardly ever discussed in the public square....What do unworking men do with their free time? Sadly, not much that’s constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: 'neither employed nor in education or training.'....In short, the American male’s postwar flight from work is a grave social ill."
Control inflation? We have to understand it first -Telegraph
"In a recent paper John Williams, president of the San Francisco Federal Reserve, asked a rhetorical question: 'Is the Fed’s inflation target too low?' Inflation is definitely stubbornly low. So it’s a good starting point but the wrong question is being asked. A more fundamental rethink is necessary - starting with: 'Should we be targeting inflation at all?' After all we can’t measure inflation, we can’t control it and we don’t really even understand it....Inflation is actually really hard to measure. The Consumer Price Index (CPI) or Retail Price Index (RPI), that are generally used, are just proxies and not very good ones....There has been talk of raising inflation targets. That’s pointless if you can’t hit the one you already have. This is a golden opportunity for central bankers to grasp the nettle and make the meaningful changes that should foster growth and stability for generations to come."
We agree. The Fed is unable to get a true reading on real world inflation using the CPI or other artificial government indexes. Alternative inflation indexes show prices are already rising 4-6% per year. The truth is the government and Fed prefer to pretend inflation is lower than it really is. Why? To keep a lid on cost of living increases to Social Security and other entitlement programs. If you want to understand how the government uses inflation as a tool of social engineering, mind manipulation, wealth redistribution, secret taxation and political power; read our Executive Summary of The Inflation Deception
9.1.16 - When Bad Jobs Data is Good News
Gold last traded at $1,317 an ounce. Silver at $18.94 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday on a weaker dollar. U.S. stocks traded flat as investors digested downbeat ISM manufacturing data ahead of Friday's key jobs report.
Deutsche Bank refuses clients' demand for physical gold -RT
"Clients of Germany’s biggest bank who have invested in the exchange-traded commodity Xetra-Gold are facing problems when they want to obtain physical gold, according to German analytic website Godmode-Trader.de. Xetra-Gold is a bond on the Deutsche Börse commodities market, and Deutsche Bank is a designated sponsor. On the website, Xetra-Gold says its clients have the right for physical delivery of gold....However, despite claims that every virtual gram of gold is backed by the same amount of physical gold, clients have been refused the precious metal upon demand....thus, troubles with delivering even small gold amounts to retail clients by Deutsche Bank may indicate that a global physical gold shortage is only growing."
The old expression, "Possession is nine-tenths of the law," means ownership is easier to maintain if one has possession of an asset and it can be very difficult to enforce if one does not. This is especially true when it comes to physical gold. For this reason, we recommend physical gold ownership instead of stocks, ETFs or other IOUs. Read more in our The Timeless Truth About Gold & Silver.
The Best Case For Stocks & Bonds Is A Bad Jobs Print -HedgeEye
"Takeaway: Worse jobs print = No Rate Hike = Stocks up = Bonds up....'Markets can handle 25 bps' (heard in DEC 2015 and AUG 2016) – in other news SP500 closed down -0.12% in AUG after having 7 down days in the last 9 on rate hike fears; can markets handle another hike into a slow-down? Perversely, best case for stocks/bonds is a slightly worse jobs print (no hike) - gotta love super #LateCycle labor data."
US Manufacturing Crashes Into Contraction In August, Election Uncertainty Blamed -Zero Hedge
"ISM Manufacturing had already rolled over in July, but August's collapse (from 52.6 to a contractionary 49.4) has erased the dead cat bounce hopes of Q2. Across the board, ISM factors deteriorated with new orders plunging....Markit's explanation is simple: 'there's anecdotal evidence to suggest that this at least in part reflects a slowing in the economy in the lead up to the presidential election.' We guess productivity has been declining for the same reason for the last 9 months? ISM had already rolled over in July, and August's collapse (from 52.6 to a contractionary 49.4) has erased the dead cat bounce hopes of Q2. Across the board, ISM factors deteriorated with new orders plunging."
8.31.16 - Why It's Wise To Ignore Gold Market Dips
Gold last traded at $1,311 an ounce. Silver at $18.71 an ounce.
NEWS SUMMARY: Precious metal prices drifted lower Wednesday on U.S. dollar strength ahead of key jobs data Friday. U.S. stocks also headed lower along with oil prices on the last trading day of the month.
Germans "Lose Faith in Banks", Rush To Buy Safes -Zero Hedge
“It is no secret that one of the most admirable qualities of the German public - in addition to its striking propensity for thrift in the aftermath of Weimar - is its stoic patience and pragmatism when dealing with adversity. However, over the past month, we grew increasingly confident that said patience would be tested, if only when it comes to matters of monetary trust vis-a-vis the local, neighborhood bank. First it was the news that Raiffeisen Gmund am Tegernsee, a German cooperative savings bank in the Bavarian village of Gmund am Tegernsee, with a population 5,767, finally gave in to the ECB's monetary repression, and announced it’ll start charging retail customers to hold their cash....That was the last straw, and having been patient long enough, the German public has started to move. According to the WSJ, German savers are leaving the ‘security of savings banks’ for what many now consider an even safer place to park their cash: home safes.”
Bill Gross: The Fed has mastered market manipulation -CNBC
"The Federal Reserve, with its bargain-basement interest rates and money printer always on standby, is manipulating financial markets and crushing capitalism, bond king Bill Gross said in his latest broadside against the U.S. central bank. In a letter to clients, Gross addresses Fed Chair Janet Yellen directly, saying the policies she has pushed 'have deferred long-term pain for the benefit of short-term gain.'....Yellen and other global central bankers 'all have mastered the art of market manipulation and no - that's not an unkind accusation - it's one in fact that Ms. Yellen and other central bankers would plead guilty to over a cocktail at Jackson Hole or any other get together of PhD economists who have lost their way,' Gross wrote....'Investors should know that they are treading on thin ice,' he wrote."
Why Gold Will Likely Be Much Higher 10 Years from Now -Seeking Alpha
“Many gold bugs and analysts watch the price of gold very closely and try to time trades based on the latest economic data or Federal Reserve statements. I view gold much differently. In my mind, gold is something to buy and hold for the long term as an insurance policy for wealth preservation....So I don't look at short-term gold price gyrations. I have no idea what gold will do today, next week, or next year (neither does anyone else). The long term chart for gold proves that this is a prudent way to view the shiny metal.”
Valley woman says bank holding money hostage -3TV News
"For Kathy Stewart, getting into her car and driving around the Valley for 12 hours a day, every day, is pretty routine. 'It's just an easy way for me to make money,' Stewart, an Uber driver told 3 On Your Side....Stewart says all of her fares are immediately direct-deposited into her Chase bank account by Uber. But when she logged on to her bank account recently, she got a strange message from Chase telling her that her account was suspended and closed down. Not only that, she could not access any of her money, roughly $500....To make matters worse, Stewart said Chase told her it would mail her a check for her account balance. She says she was told that could take 20 to 30 days. Stewart says she feels like her money has been hijacked by Chase, and she's not in the position to wait....Consumers need to know that all financial institutions have the legal right to stop doing business with a consumer or company at their discretion."
8.30.16 - The Fed's Illogical War on Cash
Gold last traded at $1,316 an ounce. Silver at $18.67 an ounce.
NEWS SUMMARY: Precious metal prices fell Tuesday as speculators decided to take month-end profits as the dollar strengthened. U.S. stocks traded lower as investors analyzed strong consumer confidence data while keeping an eye on the Federal Reserve.
Let's Discontinue Kenneth Rogoff's Commentary, Not the $100 Bill -Tamny/Real Clear Markets
"In a recent opinion piece for the Wall Street Journal, Harvard economist Kenneth Rogoff declared that there's 'little debate among law-enforcement agencies that paper currency, especially large notes such as the $100 bill, facilitates crime.' Rogoff would like to discontinue the $100 in order to - try not to laugh - reduce crime. Can the eminent economist really be so naïve as to presume that the disappearance of a piece of paper would prove effective at making the U.S. (and the world) more honest and safe? Apparently he does, while lightly acknowledging what economists refer to as the 'substitution effect.' If $100 Federal Reserve notes prove scarce, then similar euro and Pound bills will do the job, as will 10,000 yen notes. If $100 bills simplify big criminal transactions, wouldn't little gold coins simplify crime even more?....Did it ever occur to Rogoff that maybe there are too many laws and too many crimes as opposed to too many $100 bills?"
We agree with Tamny wholeheartedly. Influential economists such as Rogoff hope to sway public opinion toward further government intrusion into U.S. citizens' lives by blaming cash for crime. Central planners of every stripe (include the Fed) really believe they can convince Americans to give up their financial freedom in the name of safety. Don't buy it.
Jackson Hole as Backdrop to "War on Cash" -MarketSlant
"Friday at the Fed Symposium a document was handed out in conjunction with a discussion. Note the discussion's title: 11:55 am - Negative Nominal Interest Rates: author Marvin Goodfriend (Carnegie Mellon), discussant Marianne Nessen, head of monetary policy at Sweden’s Riksbanki. However, the discussion's accompanying handout had a different title: The Case for Unencumbering Interest Rate Policy at the Zero Bound- Marvin Goodfriend....Our takeaway was that this document was not just a discussion on NIRP risk and how to assess if/when to use it. This was also an answer key on how to make it happen. And among those recommendations was to 'Abolish Paper Currency'."
In a paper excerpt of How to Kill Cash included in the piece, the plan is exposed...
It appears Mr. Goodfriend's solution to zero or negative interest rate fallout is to abolish cash use by jacking up ATM fees to excessive levels. If you still doubt that governments and bankers worldwide have declared a 'war on cash' and that a cashless world is about to change your life in a bad way, we suggest reading TEN CONSEQUENCES OF A CASHLESS WORLD & THE SECRET WAR ON CASH.
Are U.S. lawyers helping launder money? -CBS This Morning
"On Sunday night, '60 Minutes' aired a report using hidden footage that raised questions about how far some American lawyers might be willing to go to help bring questionable funds into the U.S. The story showed what happened when an investigator for Global Witness, a London-based non-profit organization, went undercover 19 months ago. While posing as the representative of a phony African official, he met with more than a dozen New York law firms to get advice on moving tens of millions of dollars into the U.S. without the minister's name being revealed. '60 Minutes' correspondent Steve Kroft joins 'CBS This Morning' to discuss his report."
This is a perfect example of how bad money drives good morals out of society - the central topic of a soon-to-be-released book by Craig R. Smith and Lowell Ponte.
What is the Greater Fool Theory? -Zero Hedge
"The Greater Fool Theory is when the price of a good is not determined by its intrinsic value, but rather by irrational beliefs and expectations of market participants. Essentially, it is about buying a good at a price then offloading it to the next fool at a higher price. This vicious cycle would continue till the point where market participants ‘wake up’ and realize that the good is no longer worth that value. The best example would probably be the tulip mania where the Dutch were trading houses and lands just for plots of tulips. As absurd as it may sound, back then even the most rational were engaged in such madness. With such irrational beliefs and expectations of the market, it would ultimately result in a ‘bubble’....Conclusion: With investing, there is no shortcut. Do your due diligence for every stock, and do not base your buy/sell call on someone else's advice. When it comes to processing news, analyze it rationally and do not let your imagination get ahead itself. Last but not least, be objective."
8.29.16 - Our Republic Has Been Hijacked
Gold last traded at $1,327 an ounce. Silver at $18.85 an ounce.
NEWS SUMMARY: Precious metal prices rose Monday on safe haven buying despite a firmer dollar. U.S. stocks were lifted by rising consumer spending data.
Why Gold Could Be Worth $1,700/oz: Deutsche -Barrons
"It is interesting Deutsche Bank‘s commodity team put up a note on gold, reiterating their view that gold could be worth $1,700 an ounce. Analysts Michael Hsueh and Grant Sporre argue: 'The balance sheets of the main four central banks [US, China, Japan, ECB] have expanded by 300% since the beginning of 2005....If we were to assume that the value of gold should appreciate to keep the overall value of the big four aggregate balance sheet equivalent to that of the value of the above ground gold stocks, then gold should be trading closer to USD1,700/oz.....Our conclusion is that as long as the central banks’ balance sheets continue to expand, the gold price should maintain some momentum.'"
The second-largest bank in Europe has many of its own financial troubles, but Hsueh and Sporre are spot on. The recent gargantuan growth of debt is just one of many fundamental reasons why owning physical gold is a must right now. For more reasons read our free report, 2016 Gold Report - World Edition.
'The Deep State': A Washington insider argues that American democracy has been hijacked -Pittsburgh Post-Gazette
"While not a scaremongering conspiracy theory about a 'cabal of evil,' as he himself is quick to scoff at, Mike Lofgren’s 'Deep State' is nonetheless very real, a machinery that 'became ascendant over our traditional representative democracy as a result of the gradual accumulation of historical circumstances.' The best-selling author of 'The Party Is Over,' Mr. Lofgren is a Washington insider who has worked closely with, or around, many politicians, committees and agencies for nearly 30 years. His new work expounds on a political machine he says has been in place (and expanding and consolidating) for many decades, with little influence one way or another from the resident in the White House. Indeed the president, be it Democrat or Republican, is only a cog in the machine....Mr. Lofgren draws from personal experience with references to many politicians and related insiders, naming names and criticizing or praising. Mr. Lofgren’s narrative contains very reasonable, if disturbing, facts to back up his assertions that the United States has allowed its politics to function consistently in favor of the wealthy, the corporations, the military-industrial complex and Silicon Valley - the One-Percenters, if you will."
The Dark Dynamics of the Deep State -Daily Reckoning
"Today, our ruling class lies about issues both big and small without consequence. It happens on both sides of the political aisle. The public does nothing about it. And the Deep State uses this apathy to further cement its control....But the Deep State’s grand plans may be disintegrating before our eyes. June’s Brexit vote was a critical battle in the long war against the Deep State. British citizens decided they’re tired of surrendering their democratic rights to multinational corporations, unelected bureaucrats and feckless central bankers whose policy goals are at direct odds with regular people. It dealt a deathblow to the Eurocrats’ one-world government dreams....The Deep State has kept its vise grip on power through a rigged system. But what happens when the manipulated masses realize that system is finally breaking down? We may soon find out."
An Internet Giveaway to the U.N. -Wall Street Journal
"When the Obama administration announced its plan to give up U.S. protection of the internet, it promised the United Nations would never take control. But because of the administration’s naiveté or arrogance, U.N. control is the likely result if the U.S. gives up internet stewardship as planned at midnight on Sept. 30.....On Friday Americans for Limited Government received a response to its Freedom of Information Act request for 'all records relating to legal and policy analysis . . . concerning antitrust issues for the Internet Corporation for Assigned Names and Numbers' if the U.S. gives up oversight. The administration replied it had 'conducted a thorough search for responsive records within its possession and control and found no records responsive to your request.' The only thing worse than a monopoly overseen by the U.S. government is a monopoly overseen by no one - or by a Web-censoring U.N. Congress still has time to extend its ban on the Obama administration giving up protection of the internet."
8.26.16 - Duel Fed Speak Fuels Market Volatility
Gold last traded at $1,325 an ounce. Silver at $18.74 an ounce.
NEWS SUMMARY: Precious metal prices zig-zagged Friday after Fed Chair Janet Yellen's speech was undercut by Fed Governor Fisher's speech. U.S. stocks fell Friday on downward-revised GDP growth data and confusion after the Fed's dualistic statements dampened an early rally.
"Bad Cop" Fischer Spoils "Good Cop" Yellen's Party: Stocks Plunge, VIX Spikes -Zero Hedge
"Despite Yellen's hawkish tone, market participants clung to dovish hopes in her words... but Stan Fischer just clarified 'Yellen's comments are consistent with a possible September hike' and that has spoiled the party in stocks, bonds, gold, and the dollar... *FISCHER: BIG ISSUES IN GROWTH ARE INVESTMENT, PRODUCTIVITY....*FISCHER: FED IS RESOLUTELY NOT A POLITICAL BODY....*FISCHER: NOT TOO CONCERNED ABOUT ASSET BUBBLES NOW."
The financial markets whipsawed following Fed Governor Fischer's comments, which left the door open for a September and/or December rate hike. The Fed strategy is to keep the markets dazed and confused, but not depressed. After many years of financially-repressive, near-zero interest rates, the Fed still believes they can trick the world into believing a soft landing can still be engineered. Don't buy it! Instead buy gold as wealth insurance against a hard landing - which history tell us is the most likely outcome.
Years of Fed Missteps Fueled Disillusion With the Economy and Washington -Wall Street Journal
"Once-revered central bank failed to foresee the crisis and has struggled in its aftermath, fostering the rise of populism and distrust of institutions....The Fed in particular is a case study in how the conventional wisdom of the late 1990s on a wide range of economic issues, including trade, technology and central banking, has since slowly unraveled. Once admired globally for their command of the economic system, central bankers now are blamed by the left and right for bailouts during the financial crisis and for failing to foresee and manage forces suffocating the global economy in its aftermath. David Einhorn, founder of the hedge fund Greenlight Capital, cites the fable of the ant and the grasshopper, in which a famished grasshopper begs a thrifty ant for help in wintertime after failing to stockpile food during warmer weather. 'We had the grasshoppers party from 2002 to 2007 and winter came and the Fed bailed them out,' said Mr. Einhorn, referring to financial firms and individuals who lived above their means. 'Now the ants are pissed.'"
As public disillusionment spreads, expect a major backlash against those who perpetuated and promoted the illusion. Gold is not an illusion, but rather real money which stands the test of time. Read more in The Timeless Truth About Gold & Silver.
There's No Recovery for Central Bankers to Create -Real Clear Markets
"Former Fed official Kevin Warsh writes earlier this week in the Wall Street Journal: 'The groupthink gathers adherents even as its successes become harder to find. The guild tightens its grip when it should open its mind to new data sources, new analytics, new economic models, new communication strategies, and a new paradigm for policy.' He is of the growing chorus of even former insiders and members of past authority who are calling for letting go of the ideological rigidity set in place during the New Deal....The entire premise of activist central banking will be revealed as false; indeed it has already been revealed so by its own actions. Central bankers cannot create the recovery because there is no recovery for them to create. Their monetary understanding of the modern age is limited by their ideologically driven intentions to not understand. The world now knows through wasted time alone that something big is off, that the global economy is not right."
The Sinister Side of Cash -Rogoff/Wall Street Journal
"When I tell people that I have been doing research on why the government should drastically scale back the circulation of cash - paper currency - the most common initial reaction is bewilderment. Why should anyone care about such a mundane topic? But paper currency lies at the heart of some of today’s most intractable public-finance and monetary problems. Getting rid of most of it - that is, moving to a society where cash is used less frequently and mainly for small transactions - could be a big help....The first stage of the transition would involve very gradually phasing out large denomination bills that constitute the bulk of the currency supply. Of the more than $4,200 in cash that is circulating outside financial institutions for every man, woman and child in the U.S., almost 80% of it is in $100 bills. In turn, $50 and $20 bills would also be phased out, though $10s, $5s and $1s would be kept indefinitely."
Here we have another predictable argument from a well-know economist in favor of removing cash from circulation, echoing Larry Summers and a host of others. They hope to sway public opinion toward further government intrusion into U.S. citizens' lives by blaming cash for crime. Cash equals personal freedom and privacy, which the ruling oligarchy prefers to control. Read more in our White Paper: The Secret War on Cash.
8.25.16 - Fed's Indecision Bodes Well for Gold
Gold last traded at $1,324 an ounce. Silver at $18.61 an ounce.
NEWS SUMMARY: Precious metal prices steadied Thursday on a flat dollar and Fed uncertainty. U.S. stocks traded mixed a day ahead of a key speech from Fed Chair Janet Yellen.
Gold to Hit $1,600 by Christmas: ScotiaWealth's Fishman -Bloomberg
"Elliott Fishman, Director, U.S. & International Trading, ScotiaWealth joins Bloomberg TV Canada's Pamela Ritchie to discuss why he's bullish on gold and expects it to go as high as $1,800." According to Mr. Fishman $1,600 an ounce gold is the next stop on the way to $1,800 in the next year. If he is correct, that represents a 60% price increase from $1,060 - where gold prices began January 1, 2016.
Regardless of gold's price, we strongly believe it deserves a place in every portfolio as wealth insurance. Get all the facts now, before the next price stop, read our 2016 Gold Report - World Edition.
The Era of Centralization Is Ending Right Before Our Eyes -Zero Hedge
"The most critical element of the BREXIT is that it is THE closing bell being rung on the period of Centralization from 2009 to today. What do I mean by Centralization? I am referring to the era of Central Planning of the global economy by Central Banks....In the world of Central Planning, politics, not economics, drives policy. Any sensible economist would have realized QE and ZIRP couldn’t generate GDP growth around 2011. However, in the world of Central Planning, the political implications of admitting this (relinquishing control of the financial system and permitting debt defaults/ restructuring to begin) is akin to political suicide....We firmly believe the markets are preparing to enter another Crisis. With over 30% of global bonds posting negative yields, the financial system is a powder keg ready to blow."
As the world's most elite group of globalists assemble this week in Jackson Hole, it is comforting to know their plan to bring the global economy down via financial repression is failing miserably. Like an emperor with no clothes, those in the know understand that the globalist house of cards is about to fall. Make sure you own the most decentralized form of money on earth: GOLD!
Why It's Time to Go "Maximum Overweight" in Gold -Money Morning
“Most American consumers do their banking with one or more of the 10 biggest U.S. banks, like Bank of America Corp. or Wells Fargo & Co., with more than $10 trillion in assets. In any case, it's safe to say few, if any, Americans bank with Raiffeisenbank Gmund am Tegernsee, a small co-operative bank outside Munich, Germany. But now it's vital Americans know what's happening in the tiny bank with the big name. The European Central Bank's negative rate on deposits has forced the small co-op to implement negative interest rates (what it creatively calls a "custodian charge") of its own...on private clients....As I've said, the consequences of negative-interest-rate policies – financial repression – are soon to be widely felt. That's why some of the world's ultimate ‘in the know’ investors are making a beeline for gold right now. And when you see what's coming down on our heads, you'll see why it's a good idea to follow them before prices get much higher…”
45 Years Without Gold -Mises Institute
"When World War I began, many analysts believed that the international gold standard would keep the war short. A war of attrition was not thought to be possible because the disciplining effects of the gold standard — capital flight and gold outflow — were supposed to restrain the ability of states to mobilize resources in times of war....The gold standard was never the same after World War I. It survived in a modified form until August 15, 1971 — 45 years ago this month — when President Nixon cut the last link between the world monetary system and gold. The initial idea was to temporarily suspend the limited convertibility that existed; only governments could request reimbursements of gold against dollars. Unfortunately, there is nothing more permanent than temporary emergency measures....For ordinary people, the result is an inability to maintain their wealth without risk....These past 45 years have been a monetary experiment that has not ended well."
8.24.16 - Fed Credibility on the Line Friday
Gold last traded at $1,329 an ounce. Silver at $18.68 an ounce.
NEWS SUMMARY: Precious metal prices fell Wednesday after short-term speculators sold $1.5B in gold future contracts. U.S. stocks drifted lower again awaiting fresh direction from Fed speak on Friday.
Major banks, ICAP join up to create digital currency -Seeking Alpha
"UBS, Deutsche Bank, Santander, BNY Mellon and broker ICAP have teamed up to create a digital currency called the 'utility settlement coin'. The firms hope that the currency will become an industry standard used to clear and settle financial trades over blockchain, the technology that bitcoin is based on. The banks and ICAP are pitching the idea to central banks and hope to launch the utility settlement coin in early 2018. The project is competing with similar initiatives from the likes of Citibank, Goldman Sachs and JPMorgan, which are developing separate digital currencies."
Rates down, inflation up: it's 'never been worse' for cash savers -Telegraph
"The plight of cash savers will worsen rapidly in coming months, economists warn, as the twin trends of rising living costs and falling returns intensify. A combination of falling interest rates and an uptick in inflation means most cash deposits are already losing value....If inflation now rises to 3%, it's possible that inflation will reach a record multiple of the rates payable on cash - maybe even of as much as ten times."
'Angry White Male' New Book Release -Wayne Allyn Root/Amazon
"The mainstream media and ultra-liberal Democrats can’t understand why white voters, especially white men, are so angry. Wayne Allyn Root is an angry white male, and he knows why. This is his story, his testimony, and a look at what’s happening to an entire group of good people: law-abiding, tax-paying, hard-working, middle-class people. Root has declared 2016 the year of the 'Angry White Male' - a demographic he calls 'the soccer moms of the 2016 election.' In this explosive new book, 'the Trump phenomenon' is seen through the eyes of the ultimate angry white male who is determined to save the middle class. According to Root, 'What has been done to the predominantly white middle class in the past eight years is unimaginable and mind- numbing. You need to face the truth before you can act on it....That action starts with putting a plan in place to protect yourself and save our nation.'"
Jackson Hole: the three tough questions central banks must ask themselves -Telegraph
"The men and women who control the global monetary system get together for three days to debate the challenges facing the world economy – and how they might use monetary policy to fix it. This year’s title is ‘Designing Resilient Monetary Policy Frameworks for the Future’, which could mean almost anything. The markets are waiting for some clues from the Fed chairman Janet Yellen on whether there will be another rate rise this year. In truth, however, a quarter point on rates won’t make much difference. Instead, in a world awash with printed money, with deflation becoming permanent, with bonds from major economies paying negative yields, and with weirder and weirder experiments, from below-zero rates to abolishing cash, gaining increasing traction, they would be better off taking a look at themselves, and asking some hard questions. Here are three good ones to start with: is quantitative easing actually working? Have we broken the banking system? And isn’t it time to update economic models that no longer tell us much about the real world?”
8.23.16 - The Secret War on Cash Defined
Gold last traded at $1,346 an ounce. Silver at $18.92 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on Fed rate speculation and a weaker U.S. dollar. U.S. stocks inched higher as investors analyzed upbeat housing data, rising oil prices and looked ahead to Fed Chair Janet Yellen's speech.
Should Precious Metals Be a Core Holding in Investors’ Portfolios? -Think Advisor
“Steven Dunn, executive director and head of U.S. for ETF Securities, makes a compelling case for precious metals like gold, silver, platinum and palladium to be a core holding in investors’ portfolios. ‘There’s a good case for [precious metals] being a core holding of your portfolio,’ Dunn told ThinkAdvisor. ‘It may not be 20% of your portfolio, but maybe a core 5% of your portfolio.’....‘In 2016 we’ve been spending a lot more time talking to advisors about the role [of precious metals] within a portfolio, the percentage they should play within a portfolio,’ Dunn said. ‘We’re trying to make the case that commodities should never be zero, because they do some really great things in your portfolios. Typically they lower your overall risk portfolio, they bring you diversification through low correlation, and they provide you with a little bit of a performance boost.’”
Whether 5% or 20% of a portfolio, gold should be a part of your core holdings as Mr. Dunn explains. Learn more about the common sense of owning physical gold in today's uncertain world of virtual money by reading our 2016 Gold Report - World Edition.
Author Explains The Secret War on Cash -Wall Street Raw (LISTEN)
Author and Swiss America Chairman Craig R. Smith discusses his book Don't Bank On It! The Unsafe World of 21st Century Banking with Wall Street Raw host Mark Leibovit. According to Mr. Smith, most bank depositors are unaware of the new risks to them, which could include being presumed guilty of a crime simply by holding or withdrawing cash from your own bank account, which is detailed in his White Paper: The Secret War on Cash. Mr. Smith also answers Mark's questions about the prospects for the future of gold and the U.S. dollar in 2016 and over the longer term. "We have a currency war going on worldwide and it's a race to the bottom," says Craig. (listen to interview)
Dollar Weakness and Fed Expectations -Real Clear Markets
"The US dollar has fallen against all the major currencies this month. Even the pound has gained about 0.3% against the heavy greenback. What is most striking about the dollar's decline is that is has taken place despite a modest upgrade of the odds of a Fed hike....The odds implied by the pricing of the Fed funds futures have also increased....There is precedent for the Fed to adjust policy in September of a national election year, but there is no precedent for a November move. Everyone seems to recognize this. We think it is a misreading of the odds to suggest that there is a greater chance of a hike in November than September."
"It's Scary Quiet": The Past Month Has Seen The Least Volatility Since 1995 -Zero Hedge
"Right on cue, this morning the Wall Street Journal pointed out that 'the past 30 days have been the least volatile of any 30-day period in more than two decades.' In fact, they point out that only 5 days during the most recent stretch has the S&P 500 moved by more than 0.5%, which is the lowest since 1995....'Everything feels distorted and unnatural; you know the source of that is the central banks but equally there’s nothing to stop them carrying on,' said Matt King, head of credit strategy at Citigroup....As the WSJ points out, the danger is not so much complacency about markets, but complacency about central banks....Yes, central banks, to this point, have stepped up to protect markets at every sign of 'stress.' The problem is that with each new step taken by the Fed they're running out of ammunition."
8.22.16 - Is the central bank crying wolf?
Gold last traded at $1,343 an ounce. Silver at $18.85 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Monday on a flat dollar and Fed speculation. U.S. stocks drifted lower as oil prices shed 3% and all eyes turn to conjecture regarding the content of Yellen's Friday speech.
It could be a tough week for Janet Yellen -Forbes
"Fed Chair Janet Yellen has the tough task in the week ahead of speaking to markets that are looking for more guidance than she may be able to provide. Yellen's speech in Jackson Hole, Wyoming, on Friday has been anticipated for weeks, and especially in the last several days after Fed speakers suggested the Fed could raise rates as early as September....'I wish we had a Fed speak [volatility index]. I'm telling you it just spiked through the roof. It's all over the map. I'm confused about what they're trying to do,' said James Paulsen, chief investment strategist with Wells Capital Management. 'We've got people talking out of every side of their mouth. The Fed VIX is at its highest ever.'"
When will The Biggest Bank Heist in History ever end? Stay tuned...
The central bank that cried wolf? Talk of higher U.S. interest rates is often just that -Marketwatch
"Two years ago, a prominent central banker suggested interest rates could rise 'sooner than you think' after an unprecedented five-year stretch of easy money. Earlier this week New York Federal Reserve President William Dudley issued a similar warning to financial markets.... The U.S. central bank is more likely than not to raise interest rates before the end of 2016, but the timing is still an open question. Dudley strongly implied a rate hike could come as soon as September....Yet the Fed has been on the cusp of rate hikes several times since 2013 — recall the famous taper tantrum — and it seemed on the verge of acting just last spring before backing off....A problem for the Fed, though, is that raising rates could strengthen the dollar at a time when most central banks are doing like the Bank of England and cutting them."
James Grant: "This Will Turn Out To Be Very Bad For Many People" -Zero Hedge
"From multi-billion bond buying programs to negative interest rates and probably soon helicopter money: Around the globe, central bankers are experimenting with ever more extreme measures to stimulate the sluggish economy. This will end in tears, believes James Grant. The sharp thinking editor of the iconic Wall Street newsletter Grant’s Interest Rate Observer is one of the most ardent critics when it comes to super easy monetary policy. Highly proficient in financial history, Mr. Grant warns of today’s reckless hunt for yield and spots one of the biggest risks in government debt. He’s also scratching his head over the massive investments which the Swiss National Bank undertakes in the US stock market....According to Grant, 'Gold is money and money is sterile, as Aristotle would remind us. It does not pay dividends or earn income. So keep in mind that gold is not a conventional investment. That’s why I don’t want to suggest that it is the one and only thing that people should have their money in. But to me, gold is a very timely way to invest in monetary disorder.'"
As usual, James Grant is spot on in his articulation of both the present "reckless" economic environment and the simplest solution; come to grips with the reality that gold is money. It's liquid worldwide, a proven store of value and the antidote to accelerating monetary disorder. Read our 2016 Gold Report - World Edition.
How This Hedge Fund Robot Outsmarted Its Human Master -Bloomberg
"Yoshinori Nomura felt like weeping. It was the morning of June 24, Brexit day, and markets were moving against him....Then, in an instant, everything changed. When new vote counts signaled Britain was going to leave the European Union, a burst of selling sent Japanese shares to their biggest drop in five years. By luck or design, Nomura’s Simplex Equity Futures Strategy Fund ended the day with a 3.4 percent gain, one of its best results in three months of trading. 'The machine was right after all,' said Nomura, who spent more than three years refining his trading program and now oversees about 3.5 billion yen ($35 million) in the fund, one of the first in Japan to utilize artificial intelligence technology.... 'As every day goes by, the machine becomes more intelligent. It’s going to be a brave new world.'"
8.19.16 - Facebook Likes the Gold Standard
Gold last traded at $1,346 an ounce. Silver at $19.31 an ounce.
NEWS SUMMARY: Precious metal prices eased back Friday as the dollar bounced on hawkish Fed comments. U.S. stocks fell as oil prices rose; utilities and telecommunications dropped over 1 percent and investors digested Fed speak.
Fed guessing game moves up a gear as Yellen takes stage -Reuters
"The debate over whether the U.S. Federal Reserve is readying an interest rate hike will get its umpteenth airing over the coming week, with all eyes on Chair Janet Yellen to provide some clarity. Amid conflicting signals from the Fed in recent days, central bankers from around the world will gather from Aug. 25 for an annual meeting in the mountains of Jackson Hole, Wyoming, with Yellen due to speak the following day....Uncertainty over its position now has knocked the U.S. dollar, leaving it close to eight-week lows against the euro. New York Fed President William Dudley, a close ally of Yellen's, was among those sounding a more confident note in recent days on a possible near-term rate hike, citing broad progress in the U.S. economy."
The Facebook Dollar -New York Sun
"The Federal Reserve has just launched an official page on Mark Zuckerberg’s Web site, and at first glance it looks like the Fed is entering new territory. The lead item, as of our last check, is a biographical note in respect of the chairman, Janet Yellen. The first comment on it is about how if a person mounts a protest onto property of a Federal Reserve Bank, the bank will 'instruct the police' to arrest him. 'Proof,' the commenter says, 'that they own private property.' 'If she had a real job she would have been fired long ago,' writes another commenter about Mrs. Yellen. 'Can’t keep being wrong and not doing what you say you are going to in a real job [and] not suffer consequences.' Another demands: 'When are you going to stop the FRAUD of counting the debt based credit generated by the Fed and the banking system as being a U.S. legal tender money?' Writes another: 'Congrats, Knuckleheads, on creating, inflating, and perpetuating the largest asset bubble in history.'....What an irony - Facebook likes the gold standard."
Toward Stagflation - The Real End Game For Central Banks -Zero Hedge
"Negative real interest rates have been instrumental in goosing the housing market after its near-death experience in 2009....Please note that Norway is heading straight into stagflation and at some point Norges Bank will be forced to tighten monetary policy into a weakening economy. The world should take note, because the real end game for central banks will come when they are constrained by rising inflation in a weakening economy. We all know what happened after the 1970s stagflation; and hiking rates to 20 per cent in an overleveraged world is a lot harder than it was back then. The small vulnerable economies will go down this route first, with the likes of Norway, Australia and Canada already struggling. While they are still on the side of monetary accommodation, that could change abruptly as exchange rates depreciate and inflation takes hold, just as their commodity dependent housing bubbles bursts and drags economic activity down with it; larger, more diversified, economies will be next."
Is greed good? No, it’s seriously bad for your wealth -Financial Times
"Avarice, the love of money, is one of the seven deadly sins. Throughout world cultures, the belief is deep that avarice is an evil, to be avoided. But there is also a noble intellectual tradition that holds that it is good for the economy. For the Scottish enlightenment thinker David Hume, it was ‘the spur of industry’ - which helped to drive the ‘invisible hand’ of the market as discovered by his fellow countryman Adam Smith. More recently, and bluntly, Michael Douglas’ character Gordon Gekko in the film Wall Street, declared that ‘greed is good’....Fresh international research, produced under the auspices of State Street’s center for applied research, suggests that greed is not good after all. In fact, avarice can be seriously bad for our wealth."
8.18.16 - Is the Fed Committing Economic Treason?
Gold last traded at $1,357 an ounce. Silver at $19.74 an ounce.
NEWS SUMMARY: Precious metal prices rose Thursday as Fed minutes cooled rate hike prospects and weighed on dollar. U.S. stocks inched higher on surging oil prices.
Irrational exuberance begins to surface in US stock market -Financial Times
"Resting hopes for US stocks on higher earnings growth is a bet against recent history. Markets are extravagantly confident that brokers are too bearish, and that their profit forecasts for US companies are too low. The multiple of 18 times next year’s projected earnings at which the S&P 500 currently trades, according to Bloomberg data, allows little other interpretation. It is at its highest since 2002, outstripping any level it reached during the credit bubble, or when the Federal Reserve was pumping up asset prices with QE bond purchases....And companies that take a lead in buying back their own stock are also underperforming after years of outstripping the market....Put all these together, and the highest prospective earnings multiples since the dotcom boom look like irrational exuberance.”
The Federal Reserve’s Cycle of Monetary Insanity (and Treason) -Sprott Money
"In 2008; the central bankers of the West went berserk with their monetary crimes. Interest rates were driven to near-zero. Money-printing was driven to near-infinity, as represented by the Bernanke Helicopter Drop. As a condition for engaging in monetary policies which were more insane (i.e. more criminal) than anything ever done in our economies; the central bankers promised an immediate Exit Strategy, in early 2009. Through the middle of 2016; we’re still waiting....Economies are built exclusively upon sound fiscal policies, and the first and most important principle of sound fiscal policy is that monetary policy can never be allowed to dominate fiscal policies... Infinitely expanding monetary policy is just as obviously suicidal as the Keynesian doctrine of infinitely expanding debt. This brings us to the conclusion (in the title) that the Federal Reserve’s present monetary insanity can only be a program of intentional economic treason."
Is the Fed insane, negligent or outright treasonous? You be the judge after reading our White Paper on the subject, The Biggest Bank Heist in History.
Banker Who’d Revolutionize Money Says It Can Be Done From Within -Bloomberg
"Frank Breitenbach would like to pull apart the global financial system, while he’s still in it. And then put it back together again, only this time without credit bubbles, crises and bailouts...Remove from banks the power to create money, and give it back to the state....Commercial banks would be required to back their loans 100 percent with deposits - whether they come from savings, capital or their own borrowings. In other words, lenders would be barred from creating money out of nothing - an inherent attribute of the fractional-reserve banking model that’s been dominant since the Middle Ages.”
This proposal from Mr. Breitenbach is a familiar populist-proposed solution to fix the broken fractional reserve banking system. The problem is that unless gold is backing deposits, moving the power to "create money" to the state would make things even worse. (Imagine Obama with an unlimited checkbook). The world had a stable banking system when it functioned on a gold standard. Meanwhile, the most practical solution is to put yourself on a personal gold standard as we discuss in The Timeless Truth About Gold & Silver.
Who Would Win a Currency War? No One -Bloomberg
“It's been a year since a sudden, 1.9 percent decline in the Chinese yuan rattled global markets and prompted fears of a global currency war. China has mostly soothed nerves by moderating the renminbi's swoon since then. But what should really put minds to rest is the knowledge that no one - not even China, which arguably did power its rise, at least in part, on the back of an artificially depressed yuan - could win a true currency war today....First and foremost, devaluation holds out the promise of boosting exports by making them less expensive....It's not clear, however, that this strategy of implicit devaluation can achieve any wider benefits. For one thing, a weaker currency no longer guarantees an increase in exports. External demand remains sluggish because of the slowdown in global growth. Trade growth has slowed sharply since 2014.”
Stagnant wages, skyrocketing debt, currency devaluations and a rising real rate of inflation are the Fed's legacy. What's coming next in the ongoing global currency war? Find out in our 2016 World Money Report.
8.17.16 - Markets Ignore Fed Speak
Gold last traded at $1,348 an ounce. Silver at $19.70 an ounce.
NEWS SUMMARY: Precious metal prices traded steady Wednesday despite a slightly higher dollar. U.S. stocks inched above flat line following the release of the minutes from the Fed's July meeting.
Gold likely to average $1,475 an ounce during Q4 2016 -Scrape Register
"Credit Suisse has reiterated its late-June outlook that gold will rise to $1,475 in the fourth quarter. The view was included in a research note citing highlights from the World Gold Council’s report this week on quarterly demand trends, which showed that second-quarter demand rose from a year ago. Credit Suisse said in its outlook is 'primarily due to continued investment demand through ETF (exchange-traded-fund) purchases and bar/coin hoarding on prolonged macro uncertainty and negative real interest rates – (with) 39% of sovereign debt traded with a negative rate on July 27th -- along with our view for declining mine supply.'"
Each day financial analysts and forecasters grow more bullish on gold prices - which are already up over 25% this year. Credit Suisse now thinks gold prices will rise another 10% by year end. Now is the time for action. It you are still unsure, please read our 2016 Gold Report - World Edition.
Forget the stock rally, investors are holding cash -CNBC
"While the current run in the global equity markets has seen some investors enjoying the highs, there are still a number of investors who prefer to hold on to cash or invest in other alternative forms of investment. A survey conducted by Bank of America Merrill Lynch last month found that cash levels were at 5.8 percent of portfolios and at the highest levels since November 2001....A further piece of research from Wealth-X Billionaire Census showed that the world's billionaires are holding more than $1.7 trillion in cash....'Holding cash is surely a bad sign for investor confidence but it is perfectly rational,' Alastair Winter, chief economist at Daniel Stewart told CNBC via email. 'It's one of the early signs that a market is looking overextended as moves are simply not being backed up with volume.'"
In the next crisis, we suspect gold will be become the real monetary king worldwide. Why? Because gold alone functions as honest money due to its unique combination of; scarcity, liquidity, portability and most importantly, an intrinsic store of value. Cash on the other hand is under attack today by governments and the banking system, as we detail in our White Paper: The Secret War on Cash.
Global central banks dump U.S. debt at record pace -CNN Money
"In the first six months of this year, foreign central banks sold a net $192 billion of U.S. Treasury bonds, more than double the pace in the same period last year, when they sold $83 billion. China, Japan, France, Brazil and Colombia led the pack of countries dumping U.S. debt. It's the largest selloff of U.S. debt since at least 1978, according to Treasury Department data. 'Net selling of U.S. notes and bonds year to date thru June is historic,' says Peter Boockvar, chief market analyst at the Lindsey Group, an investing firm in Virginia."
America to hand off Internet in under two months -Washington Examiner
"The Department of Commerce is set to hand off the final vestiges of American control over the Internet to international authorities in less than two months, officials have confirmed....The move means the Internet Assigned Numbers Authority, which is responsible for interpreting numerical addresses on the Web to a readable language, will move from U.S. control to the Internet Corporation for Assigned Names and Numbers, a multistakeholder body based in Los Angeles that includes countries such as China and Russia.....Critics of the move, most prominently Texas Republican Sen. Ted Cruz, have pointed out the agency could be used by totalitarian governments to shut down the Web around the globe, either in whole or in part."
8.16.16 - GOLD: Monetary Policy Medicine
Gold last traded at $1,356 an ounce. Silver at $19.87 an ounce.
NEWS SUMMARY: Precious metal prices rushed higher Tuesday on safe haven buying and a sharply weaker dollar. U.S. stocks retreated from recent highs as investors pondered Fed comments on ending their failed easy money policy.
Buy physical gold; central banks are on its side, Jim Rickards says -CNBC
"Gold prices can go nowhere but up as central banks around the world try their utmost to spur inflation, author and gold market expert Jim Rickards said Monday. 'Every central bank in the world says they want inflation...they've come nowhere close...but that just means they are going to keep on trying; central banks cannot allow deflation because it increases the real value of debt...they are not going to rest until they get it,' The James Rickards Project director told CNBC's 'Squawk Box' on Monday.... Rickards, who is recommending investors to hold 10 percent of their portfolios in gold, did not give a price forecast....'When everyone wants to convert their paper to physical (gold)...there's not going to be enough to go around,' Rickards said."
What percentage of your savings are you holding in physical gold? If the answer is less than 5%, you may be well advised to at least double it this year, as Mr. Rickards and others suggest. As public faith in central banks, paper currencies and government leadership continues to erode, you will sleep better at night knowing your wealth will survive (and even thrive) in today's untrustworthy financial world. Take a moment to request our free report, The Timeless Truth About Gold & Silver.
Gold's Run Far From Over, Experts Say -The Street
"Gold has been on a tear in 2016, surging 26% and hitting a two-year high of $1,357 an ounce in July....But can the run in gold and gold-related stocks and ETFs continue much longer? Experts say hang tight, because the ride isn't over yet. 'I think we're still in the early innings,' said Axel Merk, president and chief investment officer at Merk Investments. 'I wouldn't be surprised to see $1,400 for the price of gold by the end of the year or even by October.'....At least one fund manager believes gold will even surpass its 2011 all-time high of $1,921, although it could take several years, and a few setbacks and selloffs along the way, to get there. 'I think we're going to break that high,' said Doug Groh, a portfolio manager at Tocqueville Asset Management and Tocqueville Gold Fund."
Central banks 'don't give a darn' about retirement savers -CNBC
"The idea of central banks creating wealth by boosting asset values through low or even negative interest rates may prove costly for retiring Americans and those saving for their golden years, AIG Chief Investment Officer Doug Dachille told CNBC on Tuesday. Dachille, head of the insurer's massive $351 billion investment portfolio, said 'all savers' are being negatively affected by easy monetary policies around the globe....'We're not sure there's a wealth effect from putting all rates at negative or zero,' Dachille said."
The entire global monetary and banking system is built upon public trust. This trust is in a sharp decline today because savers have been punished with zero or negative returns for nearly a decade. We suggest moving a portion of your savings outside of the banks entirely into the world's most trustworthy money - gold. Learn more about safe money tips in The Secret War on Cash.
The great achievements of capitalism have primarily benefited the ordinary citizen, not the wealthy -AEI
"In Milton and Rose Friedman’s classic book Free to Choose: A Personal Statement they made the following point: 'The great achievements of Western capitalism have redounded primarily to the benefit of the ordinary person. These achievements have made available to the masses conveniences and amenities that were previously the exclusive prerogative of the rich and powerful.' It’s an important and powerful insight that a disproportionate share of the benefits of capitalism, free markets, innovation, new products, trade, and technological advances go to the average person, and not to the wealthy as progressives like Hillary Clinton and Bernie Sanders would have us believe....Think about how wrong the progressive view is the next time you use your laptop, your smartphone, your GPS, SoundHound or Spotify, or take a ride using Uber or Lyft."
8.15.16 - Negative Yields: A Race to the Bottom
Gold last traded at $1,347 an ounce. Silver at $19.84 an ounce.
NEWS SUMMARY: Precious metal prices traded higher Monday amid rising commodity prices and a weaker dollar. U.S. stocks rose as investors cheered higher oil prices.
Why gold is about to break out: Trader -CNBC
"Gold has already rallied 28 percent in 2016, but according to one trader the charts are pointing to a new wave of momentum for the commodity. 'We're in the next uptrend,' noted CNBC 'Fast Money' trader Brian Kelly during a 'Behind the Trade' special. 'This uptrend has bounced several times. That's very positive price action.' From here, Kelly believes the excitement that has led to recent gains can be credited to two key factors: negative interest rates and the dollar. 'The U.S. dollar has been relatively weaker,' Kelly said.
Negative rates are changing the financial rules. Have you adapted your portfolio to this brave new negative return world? If not, please don't wait to diversify your savings and retirement. Read our three Special Reports on Gold, Silver and Money.
"It’s Surreal" - Negative Yielding Debt Rises To Record $13.4 Trillion -Zero Hedge
"About a quarter of the global economy now has negative interest rates. 'It’s surreal,' said Gregory Peters, senior investment officer at Prudential Fixed Income and Morgan Stanley's former chief global asset strategist, who two months ago was one of the very few to predict the market's reaction to Brexit when he said that the market was looking at it wrong and urging to 'Buy US Assets In Case Of Brexit.' Regarding negative yields he added that 'It’s clear that central banks are dominating markets. There’s a race to the bottom. Central banks are the main drivers of this, it’s not fundamental.' Money is also spilling into the global stock market, helping the FTSE All-World index to a 5.3 per cent gain this year and pushing all three main US equity indices to a 'trifecta' of fresh records this week. Some investors and analysts are starting to fret that the swelling universe of negative-yielding bonds is distorting global markets and causing more economic damage than gains."
Negative yields - now at the lowest worldwide since 2,000 B.C. - are grossly distorting reality. This anomaly helps explain why the U.S. economy looks stagnant, yet U.S. stock prices miraculously just keep reaching for new highs. The current pre-election party on Wall Street will not end well; according to those in the know. Now is the time to take some profit and move it into real money - which stands to rise regardless of who is elected.
The Stimulus Wore Off. What Now? -Real Clear Markets
"A great mystery of our time - one that should frame the campaign debate - is why the economic recovery has been so sluggish....Since the Depression, economists had supposedly acquired the knowledge to avoid deep slumps and feeble recoveries. So we thought. This failure has led to a search for explanations and villains. The latest contribution is from Josh Bivens of the left-leaning Economic Policy Institute. His study asks why the recovery is taking so long. The answer, he says, is not enough government spending....If there's too little demand, government should create more. Still, there's room for skepticism. For starters, the argument that robust government spending fueled fast recoveries in the past may be backward. The causation may have run in the other direction: Strong recoveries may have raised spending, as tax receipts surged and government spent the inflows....What's distinctive about today's economic situation is that the problem is global."
The brave new world of robots and lost jobs -Washington Post
"Job insecurity is a central theme of the 2016 campaign, fueling popular anger about trade deals and immigration. But economists warn that much bigger job losses are ahead in the United States - driven not by foreign competition but by advancing technology....The deeper problem facing the United States is how to provide meaningful work and good wages for the tens of millions of truck drivers, accountants, factory workers and office clerks whose jobs will disappear in coming years because of robots, driverless vehicles and 'machine learning' systems....The 'automation bomb' could destroy 45 percent of the work activities currently performed in the United States, representing about $2 trillion in annual wages, according to a study last year by the consulting firm McKinsey & Co....White-collar workers may imagine that they’re safe, but that’s wishful thinking. If computers can be programmed to understand speech as well as humans do, 66 percent of jobs in finance and insurance could be replaced, the most recent report says."
8.12.16 - Gold's Scarcity Driving Price Rally
Gold last traded at $1,343 an ounce. Silver at $19.70 an ounce.
NEWS SUMMARY: Precious metal prices zig-zagged Friday after speculators reportedly sold $5 billion in gold contracts at once. U.S. stocks retreated from all-time highs following disappointing retail sales data.
Gold Rally Reignited as U.S. Data Signal Lower-for-Longer Rates -Bloomberg
"Gold futures headed for the biggest gain in eight sessions after government data showed U.S. retail sales stalled in July, prompting traders to reduce bets that the Federal Reserve will raise rates by the end of the year....Bullion has climbed 28 percent this year amid speculation U.S. policy makers will be slow to boost borrowing costs, while central bankers around the world take steps to support economic growth....'Retail sales are flat and there’s so many other areas of the economy that are flat,' Phil Streible, a senior market strategist at RJO Futures in Chicago, said in a telephone interview. 'It’s hard to justify a rate hike, given the slow global growth...'"
In the short-term, gold prices can be artificially driven downward by a concerted sell-off by speculators, but fundamentals always win in the end. This is why it is vital to resist the temptation to make snap decisions based on the daily gold price. Always keep the big picture in mind, which clearly illustrates precious metals are the world's safe haven over the long-term. Discover why 2016 is the year to 'go for the gold' in our 2016 Gold Report - World Edition.
Gold Can Really Get Expensive If Miners Don't Start Digging Up More of It -Forbes
"The yellow metal’s rarity, of course, is one of the main reasons why it’s so highly valued across the globe and, for most of recorded history, recognized and used as currency. Unlike fiat money, of which we can always print more, there’s only so much recoverable gold in the world. And despite the best efforts of alchemists, we can’t recreate its unique chemistry in a lab. The only way for us to acquire more is to dig, but for how much longer? Goldman Sachs analyst Eugene King took a stab at answering this question last year, estimating we have only ‘20 years of known mineable reserves of gold.’”
Investment demand for gold jumps to all-time high -Mining
"According to the World Gold Council's Gold Demand Trends report covering the first half of 2016, ETF investors who've been stocking up on the yellow metal right out of the gate this year continued to pour money into gold ETFs in the second quarter. Frenzied investment demand were behind the best ever first half for the metal topping the first six months of 2009 when investors in the throes of the global financial crisis sought the safe haven of gold. Investment demand of 1,064 tonnes accounted for almost half of overall gold demand during the first six months of 2016 and it was the first time on record that investment has been the largest component of gold demand for two consecutive quarters.”
In Illinois, the Blue-State Model Rolls toward Bankruptcy -Will/National Review
"Deficits and unfunded pension liabilities as far as the eye can see. Chicago - Seated in his office here, wearing neither a necktie nor a frown, Republican governor Bruce Rauner is remarkably relaxed for someone at the epicenter of a crisis now in its second year and with no end in sight. But, then, stress is pointless when the situation is hopeless. Besides, if you can ignore the fact that self-government is failing in the nation’s fifth-most populous state, you can see real artistry in the self-dealing by the Democrats who, with veto-proof majorities in the state legislature, have reduced this state they control to insolvency. Illinois’s government, says Rauner, 'is run for the benefit of its employees.' Increasingly, it is run for their benefit when they retire. Pension promises, though unfunded by at least $113 billion, are one reason some government departments are not digitized at all....Illinois is a leading indicator of increasing national childishness - an unwillingness to will the means for the ends that it wills. Nationally, state and local governments’ pensions have somewhere between $1 trillion and $4 trillion in unfunded pension liabilities, depending on, among other things, assumptions about returns on pension funds’ investments."
Detroit, Baltimore and now Chicago are all financial train wrecks thanks to progressive, big-government deficit spending. In The Great Withdrawal, Craig R. Smith and Lowell Ponte examine how and why Detroit went bankrupt in 2013 and why other major U.S. cities are on the same road to insolvency. They also explain the coming great withdrawal from the banking system and how to protect yourself now.
8.11.16 - Solving the US Productivity Puzzle
Gold last traded at $1,350 an ounce. Silver at $20.02 an ounce.
NEWS SUMMARY: Precious metal prices consolidated recent gains Thursday on a slight dollar rebound. U.S. stocks traded higher as investors digested quarterly results from retail companies, economic data and rising oil prices.
The Great Productivity Puzzle -New Yorker
"In the United States over the past twenty years the tight relationship between productivity growth and wage growth has broken down. Wages have slipped behind productivity....The new data showed that productivity in the non-farm business sector of the U.S. economy - i.e., most of it - has declined for the third quarter in a row. That’s the longest falling streak since 1979, and, unfortunately, it isn’t merely a statistical blip....Since 2007, the annual rate of productivity growth has averaged about 1.3 per cent. Since 2010, it has been even lower, about 0.5 per cent....The key question is where we go from here?"
Unless U.S. economic growth and productivity greatly improve - and fast - where we go from here is a dark place called stagflation. Stagflation is the worst of all economic worlds; stagnant wages and growth coupled with an increasing cost of living. This is yet another example of the perfect storm that's helping to propel precious metal prices higher this year, and this decade. Add rising debt and bloated government regulations and it's no wonder the American dream is slowly dying. Learn more about how to restore the American Dream in our latest book, We Have Seen The Future and It Looks Like Baltimore- (Free Summary!)
CHART OF THE DAY: Poking the Productivity Bear -HedgeEye
"Below is a brief excerpt and chart from today's Early Look written by Hedgeye Director of Research Daryl Jones. '... As we've highlighted in the Chart of the Day, productivity, which is a proxy for the goods and services produced each hour by Americans, has now declined for three straight quarters. As the chart shows, productivity declined both sequentially and year-over-year. This was also the first time since 1979 that productivity has declined for three quarters in a row.'"
This trend tells you everything you need to know about America’s future -Sovereign Man
"Just this morning the US government published an extra 227 pages of rules, regulations, and proposals. This happens every single business day in America. Last week the government published over 2,000 pages of new rules, many of which border on absurdity. To give you an idea, USDA’s Agricultural Marketing Service proposed a rule about minimum and maximum diameters of potatoes that are sold in the State of Colorado. Needless to say, the more of these rules they create, the more difficult it becomes for people and businesses to produce. So it wasn’t exactly a big surprise when the US Labor Department released statistics a few days ago showing that, for the third straight quarter in a row, productivity in the Land of the Free declined. In other words, US workers are producing less than they did before. America is going backward. But there’s another side to this story. Because while US economic growth has practically halted and productivity is shrinking, DEBT CONSUMPTION is up. Way up....It’s not hard to see where this trend is going."
Fear Not, the Federal Reserve’s Relevance Is Declining by the Day -LibertyLawSite
"'The sole use of money is to circulate consumable goods.' – Adam Smith. In a recent op-ed for the Wall Street Journal, Morgan Stanley economist Ruchir Sharma observed that while the world is seemingly 'turning inward,' this comes 'in a period when countries are more beholden than ever to one institution, the U.S. Federal Reserve.' Interesting about Sharma’s piece is that if anything, it revealed the Fed’s growing irrelevance....Sharma provided readers with the too-often-forgotten truth that alongside the Fed’s quantitative easing (QE) experiment in which it sought to 'inject dollars' into the U.S. economy, 'tens of billions flowed out of the country every month.' And that’s the point. It’s exactly what I argued in my recently released book, 'Who Needs the Fed?' While the central bank can pay interest on reserves held by banks at the Fed only to inject those reserves into other banks through bond buying, it cannot drive dollar lending in an economy that doesn’t rate the lending....What’s important is that a central bank is not required to maintain currency stability. Not only is the Fed irrelevant in light of Sharma’s correct point about the dollar as the world’s currency, Sharma’s very own statistics on money flows remind us that the Fed’s ability to influence much of anything in the United States - and by extension, globally - is in rapid decline."
8.10.16 - Dead Banks Walking
Gold last traded at $1,351 an ounce. Silver at $20.17 an ounce.
NEWS SUMMARY: Precious metal prices were lifted Wednesday by safe haven buying as the U.S. dollar weakened. U.S. stocks fell as investors digested falling oil prices and quarterly results from retail firms.
Gold and silver extend midweek advance as dollar drops -Marketwatch
"Gold futures tried for back-to-back gains on Wednesday, finding traction as the dollar floundered against chief rivals and some traders bet on a potential rise in Asian demand for the yellow metal....Also supportive for gold prices, Chintan Karnani, chief market analyst at New Delhi-based Insignia Consultants, said he is bullish on both gold and silver, and expects to see a rise in physical demand for the metals....The near-term challenge for the precious metal is a 'stronger dollar and positive risk sentiment on back of upbeat U.S. data,' said UBS strategist Joni Teves, in a note to clients....'We would regard any further weakness up ahead as a potential buying opportunity, given our view that the macro story remains intact,' she said."
Deutsche Bank teetering on edge of Crisis, Angela Merkel warned -Express
"A top economist has warned that Germany's biggest bank is teetering on the edge of crisis and they only way to protect it against future shocks is to nationalize it. Martin Hellwig said stress tests carried out by the European Central Bank revealed the Deutsche Bank would be left in a precarious position in the event of another financial crisis....He said: 'Putting it short: for a long and serious crisis there simply wouldn't be enough money.'....He said: 'Turning banks into community property through public funds is not only possible but also necessary. If a bank is no longer able to help itself, the federal government should take on shares and exercise the related control functions.'"
According to DON'T BANK ON IT! author Craig Smith, today we face "Dead Banks Walking." The modern fractional reserve banking model is fatally flawed, warns Smith. Now is the time to move to safer havens. Read our free Executive Summary to get prepared for what's coming next.
Central banks are printing money as though the global economy is in freefall -Quartz
“Central banks around the world are now spending $200 billion a month on emergency economic stimulus measures, pumping this money into their economies by buying bonds. The current pace of purchases is higher than ever before, even during the depths of the financial crisis in 2009....Alberto Gallo, a fund manager at Algebris Investments, says we are in a state of 'QE infinity' with persistently low growth, low interest rates, and central bank policies that don’t fix things. ‘They won’t ever say they’re out of ammunition, but central bankers are starting to look like naked emperors,’ Gallo wrote in an article for the World Economic Forum."
Sell, sell, sell as monetary policy is a dead duck -CNBC
"Fixed income has absolutely no value and investors should instead prepare for the return of inflation to the global economy, according to Stephen Isaacs, the chairman of the investment committee at London-based alternative advisory firm Alvine Capital....'I think monetary policy is a dead duck and I think bond yields at this level for investors represent absolutely no value and a huge amount of risk. What I would like to focus on is the coming fiscal reflationary trade because I think that is creeping out of the woodwork in many places,' he told CNBC Wednesday."
8.9.16 - The Worst Economy Since 3,000 B.C.
Gold last traded at $1,346 an ounce. Silver at $19.85 an ounce.
NEWS SUMMARY: Precious metal prices rose Tuesday on safe haven buying and a weaker U.S. dollar. U.S. stocks traded near flat line amid weak U.S. productivity data and lower oil prices.
Gold and Precious Metals Are the Place to Be -Seeking Alpha
“Over the first seven months of the year, volatility has gripped all asset classes. Stock prices fell by 11.5% over the first six weeks, the dollar has traded in a range that is closer to recent highs than May 2014 lows, and commodity prices have been all over the map, the one consistent theme has been an emerging bull market in gold, silver, platinum and palladium....All four of the major precious metals that trade on COMEX and NYMEX futures exchanges have appreciated in 2016. All signs tell us that precious metals are the place to be but one must be cautious as the lofty levels of these metals could cause some vicious corrections. However, if those corrections come, they will likely be opportunities to hop on board the precious metals freight train which is making a series of higher lows and higher highs.”
In volatile times like these every portfolio needs precious metals for financial safety and peace of mind. Gold's price corrections come and go, but its value as a long-term store of wealth is enduring. Take action now, call Swiss America to discover The Timeless Truth About Gold & Silver.
James Grant: Negative Interest Rates Will End... Badly -Zero Hedge
"Negative interest rates are unsustainable and once investors decide to stop paying for the privilege of holding government debt, a banking crisis could result, says James Grant....Sidney Homer and Richard Sylla, the authors of A History of Interest Rates, found no instance of negative rates in 5,000 years. Now there are $11.7 trillion invested in negative-yield sovereign debt, including $7.9 trillion in Japanese government bonds and over $1 trillion in both French and German sovereign debt. Grant posed a tongue-in-cheek question: 'If these are the first sub-zero interest rates in 5,000 years, is this not the worst economy since 3,000 BC?'....To maintain increasingly lower interest rates would require a 'war on cash,' Grant said. He envisions a means by which the Fed would discourage and stigmatize using cash, and ultimately implement an unfavorable exchange rate on physical currency....'The case for gold is not as a hedge against monetary disorder, because we have monetary disorder, but rather an investment in monetary disorder,' Grant said."
James Grant, founder of Grant's Interest Rate Observer, is perhaps the clearest thinker in today's wacky world of Wall Street analysts. If his many decades of experience tell him negative interest rates are 'unsustainable', it is wise to heed his advice; before the U.S. and global economy crash and burn. If he sees a 'war on cash' as the only step for desperate central bankers, it is wise to prepare now. Start by reading our White Paper: The Secret War on Cash.
The Quiet Death of the American Dream -Daily Reckoning
"American per capita GDP rose an average 2.2% a year between 1947 and 2000. But it’s only averaged 0.9% since 2001, says The New York Times. The McKinsey Global Institute turned up this bitter morsel: Cited in the Times article, it says, '81% of Americans are trapped in an income bracket with flat or declining income over the last decade.'....So if the Fed can’t breathe life into the corpse, what can? Structural changes. 'The key is growth. The problem is we can’t do it by printing money,' explains Jim Rickards. 'The current economic slump is not cyclical; it’s structural. This is a new depression that will last indefinitely until structural changes are made to the economy.'...Absent necessary structural changes, the future may be a marathon run of low growth, stagnating incomes… and the Japanification of America."
The Last Known Gold Mine -Holmes/Seeking Alpha
“Gold is one of the rarest elements in the world, making up roughly 0.003 parts per million of the earth's crust. (For some perspective, one part per million, when converted into time, is equivalent to one minute in two years. Gold is even rarer than that.) If we took all the gold ever mined-all 186,000 tons, from the bullion at Fort Knox to India's bridal jewelry to King Tut's burial mask-and melted it down to a 20.5 meter-sided cube, it would fit snugly within the confines of an Olympic-size swimming pool. The yellow metal's rarity, of course, is one of the main reasons why it's so highly valued across the globe and, for most of recorded history, recognized and used as currency. Unlike fiat money, of which we can always print more, there's only so much recoverable gold in the world. And despite the best efforts of alchemists, we can't recreate its unique chemistry in a lab. The only way for us to acquire more is to dig. But for how much longer? Goldman Sachs analyst Eugene King took a stab at answering this question last year, estimating we have only ‘20 years of known mineable reserves of gold.’....Exploration will surely continue as it always has - though at a much higher cost.”
8.8.16 - Proof the Fed is Crushing the Middle Class
Gold last traded at $1,341 an ounce. Silver at $19.80 an ounce.
NEWS SUMMARY: Precious metal prices steadied Monday despite a firmer dollar. U.S. stocks drifted lower as investors further digested last Friday's jobs data amid concern over upcoming retail sales data.
Just how wrong were 2016 gold price bears -Mining
"The metal's good run year to date – one of the best performances in decades – has surprised many analysts (and even surpassed some fervent gold bugs' expectations). The 2016 entries for the London Bullion Market Association long running forecasting competition show just how bearish the consensus view was at the beginning of the year. The majority of investment and institutional analysts predicted gold would dip below $1,000 during the course of the year. The winner of last year's competition Bernard Dahdah of French investment bank Natixis, even predicted an average price in triple digits....Some of the big bullion banks including UBS now sees $1,400 before the end of the year (that's Dahdah's revised prediction too) while Credit Suisse and BofA Merrill Lynch have it even higher at $1,500 going into 2017. Dutch bank ABN Amro, another erstwhile ultra-bearish house, revised its forecast to $1,425, adding that a Trump presidency could really see things explode."
The moral of this story: investment and institutional analysts are just as clueless as most other so-called mainstream experts when it comes to predicting the future price of gold. Smart money has been diversifying into gold for many years, regardless of short-term price fluctuations. The good news: it is not too late to shift non-performing assets into physical gold - the safest and best performing asset of 2016. For details about gold's solid fundamentals read our 2016 Gold Report - World Edition.
Fed Perpetuated Problem? Fed Study Finds Many Americans Have Negative Wealth -Hedge Eye
"In a late 2010 Washington Post op-ed entitled 'Aiding the Economy: What the Fed Did and Why,' then Fed chairman Ben Bernanke defended the FOMC's zero interest rate policy and quantitative easing saying: 'Easier financial conditions will promote economic growth... And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending.'....Nearly six years have passed since Bernanke wrote those fateful words. The supposed 'wealth effect,' brought on by super easy Fed policy, has failed to 'boost consumer wealth' for a significant number of Americans. According to a recently released Federal Reserve Bank of New York study, 15.1% of households in the U.S. population have either zero or negative net wealth....Here's the key chart showing the breakdown of total wealth in the U.S. and the ownership of U.S. financial assets by wealth distribution. As you can see the top 10% of Americans own 84.5% of U.S. financial assets. In other words, debt-ridden families weren't able to participate in the Fed-stoked asset price boom. So much for the wealth effect..."
The Fed's zero-interest policy and $4 trillion in artificial stimulus have further crushed the America middle class. So far ... stagnant wages, skyrocketing debt, currency devaluations and a rising real rate of inflation are the Fed's 21st century legacy. What's next? Find out in our in our 2016 World Money Report.
It's Time To Dump The Unemployment Rate -Investors
"An unemployment rate below 5% is a relatively rare thing. Only twice before in the past 40 years has it dropped that low -- once in the late 1990s during that economic boom, and again briefly in 2006-2007. Yet unlike before, there is little joy in Mudville today. Instead of confidence and optimism, there is only malaise....Signs of gloom abound. The latest IBD/TIPP poll finds that more than a third of adults (37%) think the country is in a recession. Less than half (48%) say that the economy is improving, while 49% say it's not. More than half (55%) are dissatisfied with federal economic policies....Put simply, what's happened is that the official unemployment number has grown increasingly useless as a reliable economic indicator, for the simple reason that millions of people have simply quit looking for a job."
Stocks a Screaming Buy in Fed Model That May Never Prove Right -Bloomberg
"It’s getting harder for bulls to justify the lofty valuations in U.S. stocks, and one of the last arguments left, that equities are actually cheap when compared against bonds, is increasingly being called into question....The problem for investors is that values have diverged for so long now that it’s possible something has fundamentally changed -- and that may keep stocks from rallying as much as they would otherwise....The Fed model fares poorly compared with simpler methods of judging when stocks are attractive....'Two out of three of the ways the equity risk premium can revert are generally negative for stocks,' said Bank of America’s Suzuki."
8.5.16 - Gold and Economic Freedom Inseparable
Gold last traded at $1,344 an ounce. Silver at $19.81 an ounce.
NEWS SUMMARY: Precious metal prices dipped Friday as the dollar rebounded and short-term speculators took profits following upbeat July jobs data. U.S. stocks cheered the unexpected rise in jobs, despite lower oil prices.
Here's what the real unemployment rate looks like -CNBC
"The U.S. unemployment rate remained at 4.9 percent in July, the Labor Department said Friday. But relying on that one number as an indicator of the job market is an oversimplification of the complicated world of employment....Most economists look past the official unemployment rate - also known as the 'U-3' number- to other metrics that provide other views of the state of jobs. One of those figures is the U-6 rate, which has a broader definition of the unemployed. That rate rose slightly in July - to 9.7 percent....One area of concern in recent months has been the labor force participation rate, which measures what portion of the population is employed or looking for work....In July, the participation rate was up a tenth of a percentage point to 62.8 percent. "
What's wrong with the economy can be summed up in one word -CNBC
“In a recent interview, former U.S. Federal Reserve Chairman Alan Greenspan (the ‘Maestro’) warned that the economy was experiencing, ‘the early signs of stagflation.’ ....In fact, the U.S. economy—and indeed the entire developed world - is in the beginning stages of an unprecedented breakout of stagflation. The number one reason for this can be summed up in a single word…debt. Debt not only steers an economy towards low growth but it also mires the nation with inflation. Global debt increased to more than $200 trillion, nearly three times the size of the entire global economy, and that number is from 2014, the most recent available. All this debt engenders the stag part of stagflation because it is difficult to grow and invest for growth in an economy under such high debt burdens. The baneful part of this worldwide debt buildup is that it didn't lead to the accumulation of capital goods for the purpose of expanding productivity. Instead, it was spawned for the fruitless Keynesian ruse of what amounts to not much more than hole digging and filling.”
Alan Greenspan's call for stagflation appears to be spot on, just as his logic for owning gold written a half century ago, was spot on. "This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard." -1966 White Paper-Speech
We are all Keynesians now, so let's get fiscal -Pritchett-Evans/Telegraph
"The Bank of England has done everything possible under the constraints of monetary orthodoxy to cushion the Brexit shock. It is now up to the British government to save the economy, and the sooner the better. Monetary policy is close to the limits. The Bank’s pre-emptive £170bn stimulus package is brave – and unquestionably the right thing to do in these dramatic circumstances – but it is not an economic bazooka and much of the boost will leak into asset price inflation....'We need the stimulus right now. This situation is analogous to the crisis in 2008,' said former rate-setter Danny Blanchflower....This is the exact opposite of post-war orthodoxies, but the cult of central bank independence was always a fair weather illusion. We are all Keynesians now....All the elements of stimulus are coming together: a super-cheap exchange rate, super-easy money, and soon fiscal largesse."
Massive Majority Of Europeans Disapprove Of EU Handling Of Refugee Crisis -Zero Hedge
"When the history books are finally written, I believe the tone-deaf handling of the refugee crisis by EU bureaucrats will be seen as one of the primary catalysts in the ultimate disintegration of the European Union....A spring 2016 Pew Research Center survey conducted across 10 EU member states following the EU-Turkey agreement found that majorities in each country disapproved of how the EU was dealing with the refugee issue. Disapproval was generally greatest in countries with the highest number of asylum seekers in 2015. For example, 94% of Greeks and 88% of Swedes said they disapprove of how the EU has handled the refugee issue....At the same time, half or more in eight of the 10 EU countries Pew Research Center surveyed this spring believe that incoming refugees increase the likelihood of terrorism in their country."
Regarding the impact of 10,000 Syrian refugees arriving in America this year, Swiss America Chairman Craig R. Smith writes, "Clearly one of the most compelling reasons to bring any refugees into one’s country is to fulfill a humanitarian calling and live up to our shared responsibility as global citizens. But in doing so, we cannot deny the burdens that will be placed upon the American tax payer or the weight that will be carried by local support services in a time of ballooning federal, state and municipal debt and historically weak GDP. We also cannot deny the ongoing risk of terror intrusion and the very real threat of a radical belief system that would not stop short of infiltrating the ranks of displaced women and children in order to spread their evil ideology to the West"
8.4.16 - Banking Mess Prompts Global Cash Hoarding
Gold last traded at $1,367 an ounce. Silver at $20.44 an ounce.
NEWS SUMMARY: Gold prices rose Thursday on safe haven buying after fresh BOE stimulus ahead of Friday jobs report. U.S. stocks languished near flat line as investors await fresh employment data.
The Economic Impact of Syrian Refugees in America -Craig R. Smith
An Economic Burden or a Potential Boon? With some 6.5 million Syrians now displaced, the latest Middle East refugee crisis is being called the worst humanitarian calamity of our time. More than 250,000 people have been killed and millions of Syrians have been forced from their homes and are now flooding the world’s borders. Where have they gone? What is the fallout? What are the costs of hosting, housing and feeding them? And what is the economic impact to those countries and communities that are now contending with one of the greatest immigration challenges of our time? Full story
Learn about the economic fallout of various government decisions by reading Swiss America's 2016 RESEARCH REPORT SERIES providing all you need to know about Gold, Silver and Paper Money.
US poised to hit Obama's target of 10,000 Syrian refugees -Associated Press
"State Department totals show that 2,340 Syrian refugees arrived last month in the United States. That's more than what occurred during the entire seven months after President Barack Obama directed his team to prepare for 10,000 admissions from the war-torn country. Total admissions for the current budget year now come to about 7,900, and the vast majority of them are Sunni Muslims, records show....Rep. Vern Buchanan, R-Fla., sent a letter to Obama on Thursday calling on him to stop accepting Syrian refugees as a matter of national security. 'We are seeing a clear pattern in which a number of recent attacks have been carried out by ISIS terrorists with ties to Syria,' Buchanan said."
Europe’s Biggest Banks Are More Messed Up Than the U.S.’s -Fortune
"It could be a trillion dollar problem....The European banks are in grave danger. That’s true not in just the most troubled economies such as Italy and Greece, but in stalwarts Germany and France as well. And while the timing is unpredictable, the outcome isn’t. Europe’s lenders will eventually have to issue hundreds of billions of euros in equity at severely-discounted prices, clip bondholders with a severe haircut, and force governments to provide gargantuan bailouts....Unless Europe stops kicking, the can’s headed for a cliff."
Think your money is safe in the bank? "DON'T BANK ON IT!" was Craig Smith's response in his widely praised 2014 book. The modern banking system is doomed, warns Smith. Your best option is to find safer havens which offer; liquidity, worldwide acceptance and, most importantly, a time-tested store of value - rather than negative interest rates. Read our free 32-page Executive Summary and get prepared - before the next banking domino falls and starts a worldwide cascade of panic.
Gold futures moderately higher after Bank of England rate cut -Marketwatch
"Gold prices climbed Thursday following the Bank of England’s decision to cut interest rates for the first time since 2009 and unveil a batch of stimulus measures aimed at stimulating the country’s economy in the wake of the June 23 vote to exit the European Union....Gold gathered steam early in the session after the U.S., jobless claims rose to the highest level since the end of June, though claims are still below historical averages and analysts’ expectations polled by MarketWatch, which suggests a healthy labor market. The jobless-claims report comes ahead of the closely watched jobs report on Friday, which will be pored over to determine U.S. labor-market conditions."
Another day, another reason to own gold. What ARE you waiting for? Take action now to discover The Timeless Truth About Gold & Silver.
Brits Are Hoarding Cash Post-Brexit At Fastest Rate Since 2009 -Zero Hedge
"Households may have started to hoard their cash, with new figures showing that the amount of money being kept outside Britain's banking system is now rising at the fastest rate since the financial crisis....The rate at which households and businesses built up holdings of UK banknotes and coins rose above 8% a year for the first time since 2009, according to a Sky News analysis of Bank of England statistics....The sharp increase in the amount of notes and coins outside the banking system is likely to sound an alarm for economists, some of whom have warned that with interest rates at record lows, there is diminishing incentive for consumers to leave their money in bank accounts, prompting them to hoard their money at home."
Citizens worldwide are waking up to what might happen under “Financial Martial Law,” as former Congressman Ron Paul warns. In an interview with The Daily Crux Dr. Paul reminds readers, "Nothing is more dangerous than a broke and desperate government, when it comes to your money. And no government has ever owed more than America does today." For this reason it is vital our readers get and read our free 12-page White Paper: The Secret War on Cash.
8.3.16 - Is a Recession Looming?
Gold last traded at $1,364 an ounce. Silver at $20.47 an ounce.
NEWS SUMMARY: Precious metal prices consolidated recent gains Wednesday as the dollar firmed. U.S. stocks traded slightly higher on weak investor sentiment, oil volatility and corporate earnings.
Big players buying gold -CNBC
"It's not just Olympians who will be going for the gold this month. Bill Gross is bullish on gold, and he's got plenty of company in 2016. In a turbulent market, or worse still, a sputtering financial system, the precious metal becomes that much more precious in a market offering less and less in the way of yield. Gross voiced concerns about the financial system, economy and persistently low interest rates when he talked up gold in his August letter to investors. 'Not immediately, but at the margin, low/negative yielding credit is exchanged for figurative and sometimes literal gold or cash in a mattress,' the Janus Capital Group fund manager said in a note Wednesday. 'When it does, the system de-levers as cash at the core, or real assets like gold at the risk exterior, become the more desirable assets.'....The rising chance of investors taking either negative returns or outright losses across a number of asset classes makes real assets more valuable right now, Gross said."
Bill Gross, Stanley Druckenmiller, George Soros and Jeffrey Gundlach are all bullish on gold in 2016 because they understand Economics 101: Rising global demand coupled with falling supplies equals higher prices. Don't wait another day to diversify a portion of your assets into "real money". If you need more specific reasons, please read our 2016 Gold Report - World Edition.
Bear Market Warning Looms In The GDP Data -Zero Hedge
"On Friday July 29th, 2016, the Bureau of Economic Analysis (BEA) released the second-quarter GDP figures and revisions for prior quarters. At a disappointing annualized growth rate of only 1.20%, second quarter GDP widely missed consensus expectations of 2.50% growth. Coincidently the current 1-year average growth rate has risen at the same 1.20% and that annualized growth rate has declined for five quarters in a row....For the most part, the recent bout of stagnant GDP data has not caught the attention of the media or the markets....The graph below plots average 1-year GDP growth on a quarterly basis going back to 1948. Here are four important takeaways: 1. All recessions since 1948 started with an average growth rate greater than the current 1.20% rate. 2. There are only three instances where the 1-year growth rate was below the current level and recession did not occur. In the two most recent instances (2011/2012), weak growth was met with renewed rounds of extraordinary stimulus in the form of quantitative easing (QE). 3. Only 18% of all observations going back to 1948 are below the current 1.20% level. 4. Of that 18%, 94% occurred during or within a quarter of a recession....Though difficult in a world of poor returns, equity investors should remain defensive and highly concerned by the recent economic data."
Significant Gains Still In Store For Gold -Market Anthropology
"The prospects for precious metals remain attractive, as we believe the initial move lower in the dollar this year sets up a much larger breakdown headed into Q4 and 2017. Historically, the dollar still appears significantly stretched, which trended to a performance extreme last year as the Fed moved off ZIRP and as rate hike projections peaked. For the US dollar index, a break below 93 would begin the next phase of a large retracement move, which should coincide with lower real yields and higher precious metals prices....Moreover, from a historic cyclical perspective, the broad top potential in the dollar now aligns structurally with the explosive and final retracement declines in real yields around 1978 and 1946, respectively. Should history repeat, we would expect new highs for both gold and silver as real yields plum the cycle low."
Revealing the Real Rate of Inflation Would Crash the System -Charles Hugh Smith
"The grim reality is that real inflation is 7+% per year....What would happen if the real rate of inflation was revealed? The entire status quo would immediately implode. Consider the immediate consequences to Social Security, interest rates and the cost of refinancing government debt....Here are a few of the consequences: 1. Social Security beneficiaries would demand annual increases of 7+% instead of zero or near-zero annual increases....2. Global investors might start demanding yields on Treasury bonds that are above the real rate of inflation. ...3. Private-sector interest rates would also rise, crushing private borrowing....4. Any serious decline in private and state borrowing would implode the entire system....Who's being destroyed by 7+% real inflation? Everyone whose income has stagnated and everyone who depends on wages rather than assets to get by--in other words, the bottom 95%."
Mr. Smith's estimation of 7+% inflation is in agreement with Shadowstats.com's estimation, which includes the items the government has gradually removed from the CPI index. We agree with Henry Ford's sentiment, "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." One day the true rate of inflation will be revealed and on that day it will send gold prices intro the stratosphere.
8.2.16 - Gold hits 2-Yr High, Stocks Struggle
Gold last traded at $1,372 an ounce. Silver at $20.70 an ounce.
NEWS SUMMARY: Precious metal prices touched 2-year highs Tuesday as the dollar fell on falling Fed rate hike expectations and slow economic growth. U.S. stocks fell for a seventh day amid global growth and bank worries based on weak earnings and falling oil prices.
Why China and Russia are buying so much gold -Marketwatch
"Adding gold to official reserves protects Beijing, Moscow against dollar dominance. The good news for gold enthusiasts is that China and Russia, the world’s No. 1 and No. 3 producers, are catching up to the big industrial countries in stocks of bullion in their official reserves....Beijing and Moscow are building up gold stocks for a variety of reasons, ranging from unease about undue dependence on the dollar to distaste at the low or negative returns on Europe currency holdings, especially the euro....China seems to be following a more strategic campaign to counter the weight of the dollar, embodied by its successful multiyear bid to bring the yuan the International Monetary Fund’s special drawing right....Deflationary pressures across many advanced and developing economies raise the importance of gold as a store of value and a hedge against financial market instability."
Is the US dollar's world dominance over? Today's climate of monetary globalization - along with overtures from the UN and the IMF - does not bode well for the lasting supremacy of the dollar or the single currency reserve system as a whole, as we explain in our 2016 World Money Report
Gold hits 2-year high as dollar crashes to new lows -Investing
"Gold prices rose sharply in North American trade on Tuesday, reapproaching the strongest level since March 2014 as investors continued to push back expectations of a rate hike from the Federal Reserve in the next few months....The dollar has been under heavy selling pressure in recent sessions amid waning expectations that the Federal Reserve will raise interest rates anytime soon after data showed the U.S. economy grew much slower than expected in the second quarter. Fed funds futures are currently pricing in just an 15% chance of a rate hike by September....For the year, prices of the yellow metal are up nearly 26%, boosted by concerns over global growth and expectations of monetary stimulus."
Five biggest risks for markets in August -Telegraph
"August is usually the most torrid month for the markets. From the credit crunch to the eurozone crisis, it has carved out a reputation as the month when markets wobble, and any fissures that have lain buried in the economy suddenly crack wide open. So what might cause the markets to panic this year? A fresh blast of quantitative easing in the UK, a looming Trump presidency and a closure of the Shanghai bourse seem the most likely candidates....Here are five to watch for. 1: The Bank of England relaunches QE....2: A Trump surge....3: A unicorn fund-raising disappoints....4: A German bank fails....5: The Shanghai market shuts."
Deutsche Bank & Credit Suisse kicked out of STOXX index -DW
"Germany's largest lender, Deutsche Bank, is dropping out of the STOXX Europe 50 index of leading European companies by market capitalization. The bank has seen a dramatic fall in its share price of late. Two of Europe's largest lenders, Deutsche Bank and Credit Suisse, will be forced to leave the STOXX index of the Continent's top 50 blue-chip companies as of August 8, following a drastic decline in both banks' share value....A recent health check by the European Banking Authority (EBA) saw Germany's biggest bank among the 10 out of 51 European lenders worst suited to weather another financial crisis. Officials pointed to what they viewed as the bank's insufficient capital base, with the lender still reeling from huge litigation costs."
Europe's biggest banks are in big trouble post-Brexit. When the banking dominoes start falling, it will be too late to protect your money - as we explained in our 2014 book, Don't Bank On It! Capital controls are already being put in place to prevent bank runs. Get the full story in our 12-page White Paper: The Secret War on Cash.
8.1.16 - Stagnant Growth and Rising Prices
Gold last traded at $1,359 an ounce. Silver at $20.50 an ounce.
NEWS SUMMARY: Precious metal prices inched higher Monday on rising uncertainty. U.S. stocks traded mostly lower amid falling oil prices and declining economic growth expectations.
'Stable Money' Means Gold Money -Forbes
"'Stable money' means money that doesn’t change in value. In practical terms, this has always been achieved, as closely as has been possible, by linking the value of the currency to gold and silver, and finally, in the late 19th century, to gold alone. This was true for literally 5,000 years, from about 3200 B.C. to 1971. There has never been a 'stable money' system of any significance, which was not a gold standard system....'Unstable money' and 'currency chaos' have always been a hard sell. For over 100 years now, the funny-money promoters have been selling their ideas as versions of 'stability.' This continues to the present day. Don’t be fooled....What do all these claims of 'stability' have in common? They are all excuses for periodic devaluations and floating fiat regimes. None of them even attempts to do what a gold standard system does - ensure stability of currency value - in a better or more improved way. In the end, it amounts to rhetorical tricks; or what, more unkindly, might be called propaganda."
If you are seeking to add stability to your savings and investment portfolio, then you need to add gold - the world's most trustworthy store of value. For the details of why gold is so vital now, please read our 2016 Gold Report - World Edition.
Consumer Prices Have Soared 160% Since 2001 -Zero Hedge
"According to official statistics, inflation has reduced the purchasing power of the dollar by a mere 6% since 2011: barely above 1% a year. We’ve supposedly seen our purchasing power decline by 27% in the 12 years since 2004 - an average rate of 2.25% per year. But our real-world experience tells us the official inflation rate doesn’t reflect the actual cost increases of everything from burritos to healthcare. The cost of a regular taco was $1.25 in 2010. By official standards, it should cost a dime more. Oops - it’s now $2 each, a 60% increase, six times the official rate....Well, how about public university tuition? University of California at Davis: 2004 in-state tuition $5,684, 2015 in-state tuition $13,951. That’s an increase of 145% in a time span in which official inflation says tuition in 2015 should have cost 25% more than it did in 2004, i.e. $7,105....As for healthcare: feast your eyes on this chart of medical expenses. According to official inflation calculations, the $12,214 annual medical costs for a family of four in 2005 “should cost” $14,963 today in 2016. Oops - the actual cost is $25,826, $10,863 higher than official inflation, which adds over $100,000 in cash outlays above and beyond official inflation in the course of a decade."
While central bankers fret over too little inflation, consumers are already facing too much real-life inflation. Today investors are attempting to walk up a down escalator as negative interest rates sweep the world. Meanwhile, gold prices are up threefold since 2001 compared to the dollar; further proof the buck is much weaker than official figures suggest. Now is the time to convert paper assets into real money assets, which have a long history of outpacing the rising cost of living.
Silver - Once and Future Money -Rickards/Daily Reckoning
"Despite the advent of banking, notes, and fractional reserves, gold and silver retained their core role as world money....Silver’s popularity as a monetary standard was based on supply-and-demand. Gold was always scarce, silver more readily available....If Hillary Clinton wins, that probably means a pick-up in Senate votes for Democrats and a bipartisan infrastructure spending bill. If Donald Trump wins, he has already promised massive infrastructure spending, starting with 'The Wall.' Either way, we’re looking at more spending, bigger deficits, more money printing and, eventually more inflation. The market’s anticipation of this outcome, starting in mid-November, will be a powerful tailwind for silver."
We agree, silver presents an excellent buying opportunity this year for many reasons which are detailed in our free 2016 SILVER REPORT - The Global Metal.
Central Bankers Double Down on Insanity -Grey Owl Capital
"It’s the Central Bankers' market; we’re all just livin' in it. As of the end of June 2016, the world’s four major central banks (the Federal Reserve, the European Central Bank, the Bank of Japan – BOJ, and the People’s Bank of China – PBOC) had expanded their asset totals to $17.2 trillion dollars....The impact of recent central bank actions has been particularly acute in the prices of sovereign debt. In last quarter’s letter, we presented a graphic showing the almost $8 trillion in global sovereign debt that traded at negative yields. As we wrote then: 'That is correct – borrowers are paying to hold securities issued by Japan and fifteen European countries.' Well, the weird got weirder. Today, sovereign debt trading at negative yields tops $16.8 trillion dollars....Central bankers’ insistence on doubling down on insanity, increasing the stakes, will eventually lead to an economic catastrophe greater in magnitude than the great recession of 2008."